Defunct refinery costs eat into KenolKobil's 2017 earnings
1 weeks ago, 11:06
Oil marketer KenolKobil's #ticker:KENO net profit for the full year to December remained flat at Sh2.4 billion as one-off costs ate into the benefits that accrued from increased sales.
The one-off costs included a final Sh570.2 million impairment the oil marketer has been writing off as losses accrued from the defunct Kenya Petroleum Refineries Ltd (KPRL). "
Absent the one-off costs, the business would have registered a net profit or about Sh3.4 billion," David Ohana, the firm's managing director, stated.
Defied slowdown The oil marketer recorded the higher sales despite the slowdown in the economy, with management attributing the increase in volumes to "strategic" partnerships with the world's leading oil producers.
Mr Ohana says high international prices further boosted the jump in sales, adding that he anticipates that prices will this year fluctuate between lows of about $58 a barrel and highs of $65.
The oil marketer, which also has operations in Burundi, Ethiopia, Rwanda, Uganda and Zambia, closed the year with finance costs of Sh340.7 million compared to Sh354.7 million in 2016.
"Most of the cash generated by the business was employed in reducing debt, which combined with bank facilities restructuring contributed significantly in reduction of financing cost," said Mr Ohana.
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