Medical gases manufacturer BOC has posted a 22.6 percent increase in net profit to Sh61.7 million for the six months to June 2024, from Sh50.3 million a year prior, on lower costs.
The company reduced its overheads for the period to Sh165.7 million from Sh194.2 million a year earlier, citing efforts to control costs in a period of falling revenues.
“Distribution, selling, and administration expenses have reduced in the current period, in line with deliberate management interventions to reduce costs,” the company said in a trading statement on Thursday.
The manufacturer's lower costs helped offset an 11 percent drop in revenue from Sh589.9 million to Sh523.4 million as BOC faced the end of some donor-funded projects that had required it to supply medical gases, install medical gas pipelines and liquid oxygen tanks.
However, BOC was given a reprieve from the expiry of some tenders, giving it a pricing advantage as it adjusted its charges to customers to offset an increase in the cost of electricity.
“A pricing benefit is being realised in 2024 as various 2023 year tenders come to an end, allowing the company to adjust pricing on account of a 60 percent increase in the electricity tariff in April 2023," BOC added.
The firm expects to see a gradual increase in demand and access to medical gases as a result of the infrastructure projects implemented by the company last year.
At the same time, the company says it expects profitability to improve in the second half of the year as a result of anticipated new projects, price revisions (increases) on expiring tenders that the company is able to recapture, and the benefit of a five percent reduction in electricity tariffs as gazetted.
BOC's Board of Directors has declared an interim dividend of Sh2.50 per share for the period compared to last year when no dividend was declared.
The interim dividend will be paid on or about October 14, 2024 to shareholders on the register at the close of business on September 20.
