Market News

Kenya Pipeline’s net profit up 16pc on fuel earnings

Kenya Pipeline Company’s depot in Eldoret. FILE PHOTO | NMG
Kenya Pipeline Company’s depot in Eldoret. FILE PHOTO | NMG 

Kenya Pipeline Company’s (KPC) net profit for 2016 jumped 16 per cent lifted by higher fuel supply earnings.

The parastatal’s net profit increased to Sh8.4 billion from Sh7.2 billion posted in the previous financial year.

“The company’s growth has been underpinned by strategic initiatives around prudent cost management and efforts to enhance fuel supply in Kenya and the region,” said managing director Joe Sang.

KPC overall recorded a marginal two per cent growth in fuel transport volumes to 5.9 million metric tonnes from 5.7 million metric tonnes in 2014/15.

On the domestic front, fuel transport volumes rose by seven per cent from 2.9 million metric tonnes to 3.1 million metric tonnes. However, the export volumes decreased by three per cent to 2.7 million metric tonnes from 2.8 million metric tonnes.

The decrease is attributed to loss of transit volumes on the Central Corridor. Revenue from transportation of fuel increased to Sh23 billion in the year under review from Sh21.4 billion in the previous year.

Mr Sang said the company is working hard to reclaim lost market share.

“KPC in April introduced a promotional tariff on all transit products in all our western Kenya depots, which is expected to improve our market share in the regional petroleum trade,” he said.

Total operating expenditure decreased by 7.5 per cent to Sh11.9 billion from the previous year’s Sh 12.8 billion.

KPC chairman John Ngumi said the company plans to expand into the wider East and Central African region, as well as its business model.