BOC Kenya maintains dividend payout despite 35.2pc profit drop

Industrial gas manufacturer BOC Kenya has maintained its dividend payout level despite its profit dropping 35.2 per cent due to increased competition.

The company, which is controlled by German firm Linde Group, has proposed a final dividend of Sh3 per share bringing the total payout for the year ended December to Sh5.20 a share.

BOC Kenya, which recently appointed a second consecutive female chief executive, made a net profit of Sh148.6 million in the period compared to Sh229.6 million the year before.

Sales of industrial and medical gases as well as welding products tanked by a tenth to Sh1.1 billion blamed on imports from rival players and forex losses. “Revenue for the year was down due to increased market competitiveness,” BOC Kenya said in a statement.

The company is now banking on a new oxygen filling facility it set up in Tanzania last year to grow revenue, defend market share and remain competitive as it will no longer be relying on exports from Kenya.

“With this facility, the group is well placed to capture business opportunities in Tanzania through product availability and competitiveness.”

BOC Kenya last tapped Millicent Onyonyi as managing director with effect from April 1, 2016 to replace Maria Msiska who left at the end of January.

Prior to her new appointment, Ms Onyonyi was regional retail co-ordinator at Libya Oil Africa –which trades as OiLibya– where she looked after 18 markets across the continent.

READ: Millicent Onyonyi appointed to head BOC Gases

The oil marketer is owned by the Libya African Portfolio, a sovereign investment fund set up by the late Muammar Gaddafi. Ms Onyonyi also currently serves as a director at Geminia Insurance and State-owned wholesaler Kenya National Trading Corporation.

The Linde Group subsidiary has four wholly-owned subsidiaries including BOC Tanzania Ltd, BOC Uganda Ltd, Kivuli Ltd, and East African Oxygen Ltd (dormant).

Ms Onyonyi’s first assignment will now be to defend and grow BOC Kenya’s market share which is increasingly under attack from imported medical oxygen.

Sale of medical and industrial gases accounts for about 80 per cent of BOC Kenya’s total revenue, with the Ugandan and Tanzanian export markets making up a tenth of total annual sales.

The Tanzanian oxygen plant is expected to lift the contribution of subsidiaries. Mrs Msiska was appointed to head BOC Kenya in September 2010 after the company failed in its bid to acquire its rival Carbacid, a takeover that would have given it a presence in the lucrative carbon dioxide market.

This was after John Kariuki resigned in March 2010 amid BOC Kenya’s sluggish performance, difficulties in entering new markets and botched takeover of competitor Carbacid Investments.

Shares of Carbacid and BOC Gases resumed trading in November 2009 after nearly five years of non-trading having been suspended in December 2005 linked to an attempted hostile takeover.