NAIROBI, Kenya, Sept 10 – Oil marketer KenolKobil announced a Sh3.9 billion loss in the first half of 2012, compared to a Sh2.2 billion net profit in the same period last year.
Gross profit declined by 70.1 percent from Sh6.1billion to Sh1.8billion in the first half of 2012.
KenolKobil said the performance was adversely affected by losses from foreign exchange taken in the latter part of 2011 and the first two months of 2012.
A depressed global economic environment, falling international oil prices and turbulent local conditions with high inflationary pressure and high borrowing costs also contributed to the losses.
In a statement, the management also attributed the loss to a downward adjustment of prices by regulators in various countries with KenolKobil severely impacted due to high holdings of inventory at the end of 2011.
Administrative and operating profits climbed 33.9 percent to Sh1.9billion. This substantive increase was mainly due to additional expenses from the Tanzanian terminal which is now fully operational, as well as an increase in unrecoverable VAT.
Finance costs climbed 153.1percent to Sh1.1billion as a result of a 47.4 percent increase in short term borrowings to Sh25.6 billion as well as higher interest rates.
Turnover climbed 24.7percent, pointing to a strong growth by the business despite lower prices.
Despite the disappointing performance, management is positive that the deal between key shareholders and Puma will see significant benefits arising to the remaining shareholders who do not take up the offer made to them.
KenolKobil had issued a cautionary notice in May 2012, that key shareholder of the company had signed an exclusive agreement with Puma for the sale of their majority shareholdings in KenolKobil.
The Board of Directors has recommended zero interim dividends to the shareholders.