KenolKobil nearly doubled its net profit for the year ended December 2015 helped by a reduction in borrowing costs and the sale of assets following disposal of its units in Tanzania and the Democratic Republic of Congo.
The NSE-listed oil marketer’s after-tax earnings grew by 84 per cent from Sh1.09 billion in 2015 to Sh2.01 billion during the period under review while finance costs went down by 53 per cent to Sh651 million.
The company is forecasting better results this year to be driven by expansion into the retail business.
“The Group is optimistic that the growth in earnings and profitability will be sustained in 2016 and going into the future. This will be driven by focused expansion of the retail network by adding new service stations in the countries where we operate in,” said KenolKobil’s managing director David Ohana.
The oil firm is also eyeing partnerships with various brands including restaurants at selected service stations to boost income from non-fuel business.
Last year, KenolKobil earned Sh1.4 billion from other sources outside sales of fuel. The income stood at Sh851 million in the preceding year.
Following the positive performance, KenolKobil has declared a dividend of Sh0.25 per share, subject to approval by shareholders during the annual general meeting to be held on May 12.
Sale of units
The company is planning to settle all its debt this year, currently standing at about Sh2.8 billion, using income realised from sale of its businesses in Tanzania and the Democratic Republic of Congo, largely seen as non-productive.
KenolKobil cited “lack of a level playing field” in Tanzania where it said it was in competition with other oil marketers, some who allegedly are not compliant to regulations such as taxation.
It operated 17 service stations in Tanzania. The closure took about three years during which Mr Ohana says the company had reduced its staff to about 7 who were finally affected by the shutdown of operations.
“The group has developed an effective strategy of constantly reviewing and restructuring debt. With the traction we gained and supported by low oil prices, we are confident that the group will be debt free within 2016,” said Mr Ohana.
Apart from Kenya, KenolKobil operates in Uganda, Burundi, Rwanda, Zambia and Ethiopia.
