Bumper H2 profits for Engen

Keikantse Lesemela
Thursday, 25 February 2016
Stable international oil prices have favoured Engen Stable international oil prices have favoured Engen

Engen Botswana, the Botswana Stock Exchange-listed company has announced that it is expecting an improved performance for its financial results covering the year to December 2015.

In a filing to the domestic bourse, the Gaborone-based company said the increase  is mainly attributable to an increase  in volumes sold and relatively stable international crude oil prices, which mitigated inventory revaluation losses. International crude oil prices dropped from levels of over $100 per barrel at the beginning of 2014, to less than $30 per barrel by early January this year. 

In a statement signed by Engen Chairman, Dr. Shabani Ndzinge, shareholders are advised to exercise caution when trading in the company’s securities until a detailed announcement is made.  “Accordingly the shareholders of Engen Botswana Limited are advised that the group expects to release results for the year ended 31 December which will be significantly higher than the corresponding year,” reads the statement.

Engen, which has a market capitalisation of P1, 3 billion has managed to remain afloat in the past two years despite dropping fuel prices. In the half-year period ended June 30, 2015, Engen recorded a 25 percent increase in gross profit to P148 million from P118 million in the same period in 2014 while its operating profit increased by 47 percent to P105 million from P73 million recorded in the previous period.

This was due to an increase in the wholesale selling margin, increased sales volumes and controlled expenditure, which declined by 4.4 percent in February last year. However in its full year ended 31 December 2014, the company’s gross profit decreased by 26.9 percent from P247.4 million in 2013 to P180.9 million in 2014, mainly due to the decline in international crude oil prices.

The company’s overall performance indicated a 49.9 percent decrease in net profit after tax from P130.2 million in 2013 to P65.2 million at the end of 2014. Meanwhile, the company has declared a special dividend of 30thebe to its shareholders.

The dividend, which covers the year to December 2015, is payable on or about the 11th of March 2016. Engen sells petroleum products to retail and institutional customers. At BSE, Engen share closed Wednesday unchanged at 850thebe.

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