BOC Kenya profit up 34% despite cheap gas imports, loss of contracts

NAIROBI, KENYA, SEPTEMBER 3 ― Gas manufacturer-BOC Kenya has posted a 34.2 per cent jump in its half-year net earnings, despite continued pressure from illegal gas refilling business and low cost imports which has led to loss of major public sector tenders.

The firm has reported a Ksh57.3 million profit-after-tax for the year to June, up from Ksh42.7 million it posted in a similar period last year.

The gains have been pegged on among other factors, reduced operating costs and foreign exchange returns.

Revenue for the six months period ended June 30, 2018 however dropped by 5.5 per cent to Ksh487.1 million.

This is compared to Ksh515.6 million the industrial gas manufacturer made in a similar period last year.

The Nairobi Security Exchange listed firm has attributed the variance to a one-off contract in the prior year.

It has also claimed:“reduced demand in export markets, inability to supply certain public sector customers on account of long overdue debt as well as continuing pressures from low-cost imported products that constrain the company’s volume-growth initiatives.”

The company which operates in Kenya, Tanzania and Uganda has been struggling to beat low-cost imported products a time when Kenya has witnessed increased illegal gas refilling business, which has denied genuine players revenues.

The tough business environment saw BOC profits for the year 2017 drop 68.8 per cent to Ksh39.3 million, from Ksh126.3 million the previous year.

READ:Illegal gas business, imports push down BOC profit by 68.8%

The management is however optimistic of good business going forward with a further growth in the second half.

“The board anticipates improved results in the second half of the year and is working with management to ensure there is continuing monitoring and evaluation of laid out action plans and customer projects are delivered temeously,” the firm said in its financial report.

The board has declared an interim dividend of Ksh2.35 per share.