The reported losses are indicative of an expected trend for companies which have exposure to foreign exchange based transactions, some of which have been forced to take up foreign loans due to stricter terms of credit from local banks.
The shilling’s average exchange rate to the dollar in the first six months of this year stood at 103.38, compared to 101.47 in the first six months of 2016.
The two firms shrugged off the exchange losses to record a profit growth in the six month period.
Total’s net profit grew by 33 per cent to Sh958 million, after its sales increased by Sh22.9 billion to stand at Sh71.8 billion.
KenolKobil’s net profit rose by 19.5 per cent to Sh1.4 billion, with revenue also driven by higher crude prices in the global market.
Oil marketers Total and Kenol Kobil suffered the negative effects of a depreciating shilling in the first half of the year, reporting combined foreign exchange losses of Sh135 million.
This underlines the negative impact of currency depreciation whose flipside will be a gain by commodity exporters.
TPS Eastern Africa also reported that the exchange loss on its foreign currency loans deepened to Sh45.7 million in the six month period from Sh10.6 million in the same period last year. Total’s exchange loss stood at Sh109.6 million, while that of KenolKobil was Sh25.6 million.
The reported losses are also indicative of an expected trend for companies which have exposure to foreign exchange based transactions, some of which have been forced to take up foreign loans due to stricter terms of credit from local banks.
The shilling’s average exchange rate to the dollar in the first six months of this year stood at 103.38, compared to 101.47 in the first six months of 2016.
“Depreciation of local currencies mainly in Kenya and Burundi led to a forex loss of Sh25.6 million in the first half of 2016 compared to a forex gain of Sh39.3 million in the first half of 2016,” said KenolKobil in a statement accompanying their half-year results which were released earlier this month.
Total, however, said in their half year statement the outlook for the second half of the year remains optimistic, especially now that the shilling has started to reverse some of the losses to the dollar registered in the first half of the year.
The two firms shrugged off the exchange losses to record a profit growth in the six month period. Total’s net profit grew by 33 per cent to Sh958 million, after its sales increased by Sh22.9 billion to stand at Sh71.8 billion.
KenolKobil’s net profit rose by 19.5 per cent to Sh1.4 billion, with revenue also driven by higher crude prices in the global market.
Oil marketers are among the most active players in the foreign exchange market, buying dollars regularly in order to meet their obligations to petroleum sellers abroad.
Petroleum products account for between 14 and 16.5 per cent of Kenya’s total import bill in any given month, third behind non-food industrial supplies (32-38 per cent) and machinery & capital goods at 18.25 per cent.
