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Non fuel products boost Kenol profit

NAIROBI, Kenya, Feb 28- A continued focus on the growth of non fuel sectors boosted KenolKobil Group’s net profit in 2011 which went up by 70.9 percent to Sh3.2billion.

The strong performance was registered despite the myriad of challenges such high energy prices and stringent regulation in the oil industry, particularly in Kenya.

“The gross margin has gone up mainly due to stronger contribution coming from sectors as trading, resell, LPG (Liquefied Petroleum Gas), export, lubricants, fuel oil, non-fuels and aviation,” the Group’s Chairman and Managing Director Jacob Segman said.

Net sales jumped by 119 percent to Sh222.4 billion while the cost of sales grew by 123 percent to Sh210.1 billion.

The group’s Earning Before Interest, Tax, Depreciation and Amortisation (EBITDA) went up by 83 percent from Sh3.4 billion in the corresponding period in 2010 to Sh6.3 billion.

“Fixed assets have not been restated to historical values upon change of the group policy from revaluation of fixed assets,” Segman added.

This increase was however diluted by a huge jump in exchange losses due to currency fluctuations in most of the markets where the oil marketer operates in.

The Kenyan operation suffered forex losses amounting to Sh982 million due to the sharp decline in the local unit particularly in the last quarter of the year.

The firm’s directors have recommended a dividend payout of 43 cents per share which is subject to shareholder approval at the 53 Annual General Meeting on April 27.

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Looking ahead, Segman emphasised that they would continue to implement its strategy of geographical expansion outside Kenya and at the same time focus on areas that guarantee high rates of return.

Despite the challenges in the downstream business, KenolKobil intends to continue to play by the rules in order to deliver maximum value to their shareholders.

“Management strongly believes that the group performance prospects remain very strong and will continue to deliver strong growth in the coming years,” the chairman added.

In addition, he pledged to continue positioning the firm strategically both in downstream and mid stream business in all the markets that it is represented through ‘organic’ and acquisitions.

With subsidiaries in ten African countries, KenolKobil boasts of over 400 Service stations and other export markets such as South Sudan, Malawi and Somalia.

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