Companies

BOC issues profit warning on depressed sales

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Industrial gas manufacturer BOC Kenya has issued a profit warning for the full year ending December. FILE PHOTO | NMG

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Summary

  • The manufacturer, in a statement issued on Wednesday, projects that net earnings for the current financial year ending December 31 will drop by 25 per cent when compared to earnings recorded in 2016 financial year.
  • The group posted Sh126 million in profits in the last financial year, down from Sh148 million recorded in 2015, according to its 2016 annual report.

Industrial gas manufacturer BOC Kenya #ticker:BOC has issued a profit warning for the full year ending December, pulled down mainly by a decline in sales volume.

The manufacturer, in a statement issued on Wednesday, projects that net earnings for the current financial year ending December 31 will drop by 25 per cent when compared to earnings recorded in 2016 financial year.

The group posted Sh126 million in profits in the last financial year, down from Sh148 million recorded in 2015, according to its 2016 annual report.

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Subsidiaries

The company, which is controlled by German firm Linde Group, has four wholly-owned subsidiaries including BOC Tanzania Ltd, BOC Uganda Ltd, Kivuli Ltd, and East African Oxygen Ltd (dormant).

“The Board of Directors of the Company projects that the Company’s net earnings for the current financial year ending on 31 December 2017 may be at least 25 per cent lower than the level of earning in the previous financial year, 2016,” said BOC Kenya's managing director, Millicent Onyonyi.

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“Primarily due to a lower level of sales due to depressed business activity and a credit adjustment made in prior year following a review of the methodology adopted by the company in estimating stock obsolescence allowances. This adjustment, which is cash flow neutral, will not recur in the current year,” she said.

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The board of directors and management remain hopeful that business environment will improve as the year comes to an end.