Engen has managed to shrug off challenges in the petroleum sector with unaudited group results for the half year ended 30 June 2018 indicating the company’s resilience despite fiery contest in the industry.“Notwithstanding an increase in the level of competition the company continued to deliver strong performance from its operations. It is expected that performance will continue to be robust for the remainder of the year,” said the company.
For the first half, Engen record a profit before tax of P101, 1 million, which is a 44 percent increase compared to the same period last year and attributed to inventory gains being higher than the comparative period in 2017 due to movements in international crude oil and finished products prices.The company’s trademark has also helped shrugoff retail sales challenges Engen faced in the first half of the year.
“Our strong brand and unique convenience offering continue to be a valuable differentiator in the market and contributed to the successful financial performance in the period under review,” said joint financial statement signed by Chairman, Dr Shabani Ndzinge and Managing Director, Chimweta Monga. Meanwhile, the BSE listed company has told the market that they are planning to open additional retail outlets during the second half of the year.
Despite the retail sales channels of the business declining by a marginally four percent, compared to the prior year, Monga the commercial side of the business was a strong contributor.“Although there was shortage of liquefied petroleum gas (LPG) in the first five months of the year due to refinery shutdowns, we expect this situation to improve during the second half of the year,” said Monga.
Monga said sales volumes in 2018 were lower than those recorded in 2017 mainly due to erratic supply of LPG from the company’s refinery in Durban. Meanwhile, Engen believes that the increasing international fuel prices and the need to offset the growing slate under-recovery will put pressure to adjust the fuel prices upwards resulting in increased inflation during the remainder of the year.
Statistics indicate that the slate receivable from government increased from P226 million to P305 million as of June 2018. “While government made some payments to the industry towards the slate under-recovery in the second quarter of 2018, a substantial amount remains unpaid thereby affecting the liquidity of the oil marketing companies,” said Monga.