In a statement through the Nairobi Securities Exchange (NSE), the company’s CEO Jacob Segman said the drop was due to controls in oil prices and high financing costs.
In September last year, KenolKobil announced a Sh3.9 billion loss in the first half of 2012, compared to a Sh2.2 billion net profit over the same period in the previous year.
“KenolKobil Limited makes this announcement pursuant to Capital Markets Authority (CMA) regulations for publicly listed companies. The company projects that earnings for the year ending December 31, 2012 will be materially lower than reported for the same period in 2011,” Segman said.
He said the performance in the first half 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.
“The company initiated and continues to pursue major measures to improve profitability and restore positive cash flow during the second half of 2012,including business re-engineering, cost cutting and change in management of inventories,” Segman who is also the company’s chairman said.
The latest announcement comes five days after Swiss firm Puma Energy dropped its intention to buy a 100 percent stake in KenolKobil.
Puma Energy intended to offer minority shareholders the option of selling their shares through a mandatory general offer a move that was aimed at growing KenolKobil.
“However, it should be noted that management continues to take all necessary actions to improve company’s profitability and cash flow during 2013,” Segman assured.
The group consists of subsidiaries in nine African countries outside Kenya (head office) including, Uganda, Tanzania, Rwanda, Zambia, Ethiopia, Burundi, Zimbabwe, Mozambique and DR Congo.