NAIROBI, Kenya, Jul 26 – KenolKobil has reported an 83 percent growth in after tax profit posting Sh2.16 billion in the six months ended June 2011.
The group posted Sh1.17 billion during the corresponding period in 2010.
In a statement to the Nairobi Stock Exchange, KenolKobil Group Chairman Jacob Segman said the marketer rode off challenges occasioned by high international fuel prices and a weakening shilling buoyed by increased sales and efficient cost cutting measures.
During the period, net sales grew by 38 percent from Sh83.3 billion from Sh60.3 billion. KenolKobil puts this down to effective management of its stock, regional growth and improved customer efficiency.
Mr Segman said prudent management of distribution costs saw them dip by four percent from Sh546.5 million to Sh527.2 million. Administrative costs however went up by 33 percent due to provisions made by the management for doubtful debt as well as inflationary pressure.
“The overheads have otherwise been well contained in line with the budgets,” Mr Segman stressed.
A weakening shilling also affected its financing costs as foreign exchange losses accounted for 65 percent of total financing costs while bank interest costs went up because of increased borrowing.
Mr Segman said the firms subsidiaries across Africa performed well during the first half and remains bullish over their contribution to the bottom line in future.
“The acquisitions and expansion of storage facilities will play an important role in the group’s quest to expand its channels of supply and distribution within East, Central and Southern African regions,” he said.
KenolKobil forecasts a stronger second half as investments made in the region bear fruits.
The group intends to grow the contribution of its non-fuel businesses from 10 percent to 25 percent within the next six to ten years. KenolKobil has plans to invest $10 million (Sh857 million) into real-estate projects in a number of its subsidiaries.
It is also eyeing opportunities in Liquefied Petroleum Gas (LPG) and lubricants.
The directors have recommended an interim dividend of Sh0.57 cents per share payable on from August 19.
KenolKobil is scheduled to hold an investor briefing on Wednesday where it will give more insight into the company’s performance as well its growth strategy.