KenolKobil’s #ticker:KENO net profit in the six months ended June rose 16.07 per cent compared to a year earlier after sales revenue grew by a quarter and costs nearly halved, the oil marketer reported on Thursday.
Profit after taxation increased to Sh1.65 billion from Sh1.422 billion, the Nairobi Securities Exchange-listed firm said in a financial statement.
KenolKobil – which also operates in Uganda, Rwanda, Ethiopia, Burundi, Mozamanique and Zambia – said earnings from sales in the six-month period increased 24.17 per cent to Sh90.19 billion, helped by increased international oil prices and an eight per cent growth in sales volume.
“This group performance has been achieved in an operating environment characterised by a sharp rise in international oil prices, stiff competition, pressure on consumers’ disposable incomes, inflationary pressure and other deteriorating macro-economic factors in many of our key markets,” said managing director David Ohana.
“The volume growth was spread across all the business segments.”
The country’s third-largest oil distributor by market share after Vivo Energy and Total also cut operating costs by 46.44 per cent to Sh893.94 million from nearly Sh1.67 billion in the same period in 2017.
The dip in expenses, Mr Ohana said, was on account of streamlined procurement processes, efficient cost management and absence of a Sh300 million debt provision a year earlier owed to the defunct Kenya Petroleum Refineries Ltd (KPRL).
The firm’s net earnings were also helped by a Sh27.22 million foreign exchange gain, a turnaround from Sh25.61 million loss last year, on stringent management of forex transactions.
KenolKobil, however, spend nearly Sh132.83 million on servicing loans, a 61.96 per cent surge compared with Sh82.01 million a year ago, “due to volume growth and increased international oil prices”.
“Along with a significant increase in LIBOR rates, this increased our local borrowing levels and cost of our dollar denominated loans during the period,” Mr Ohana said.
The board has proposed an interim dividend of Sh0.36 per share.