KenolKobil has attributed the huge loss to an unfavourable business environment, volatile international oil prices, difficult local conditions in almost all its operating markets and high inflationary pressure.
“The group has recorded disappointing results for the year,” Group Managing Director Jacob Segman said.
The most significant impact came from the realized exchange losses on forward contracts taken in the later part of 2011 and first quarter of 2012 which hit Sh4.6 billion from Sh1.6 billion together with a substantial increase of 66 percent in interest expenses.
Administrative expenses went up to Sh5.8 billion from Sh4.1 billion in 2011.
“The Sh1.7 billion increase in administrative expenses relates to change in measurement and evaluation basis,” Segman said.
Gross profit went down to Sh4.3 billion from Sh12 billion in 2011 with cost of sales hitting Sh186 billion.
The MD says reduction of borrowing will remain a key management focus with tighter inventory management, slowing down capital expenditure and more stringent cost measures.
The disappointing results come after a deal that would have seen KenolKobil taken over by one of the world’s largest energy firms, Puma Energy flopped.