State-owned Kenya Pipeline Company yesterday reported a 16.7 per cent jump in net profit for 12 months through June 2016 on “improved fuel supply and a prudent cost management strategy”.
KPC’s post-tax income rose to Sh8.4 billion from Sh7.2 billion it posted a year earlier.
The parastatal’s earnings before taxation increased 12.2 per cent to Sh12.0 billion from Sh10.7 billion in the previous financial year ended June 2015.
“The company’s growth has been underpinned by strategic initiatives around prudent cost management and efforts to enhance fuel supply in Kenya and the region,” KPC’s managing director Joe Sang said in a statement.
Revenue from transportation of fuel increased 7.5 per cent to Sh23 billion from Sh21.4 billion, the company announced.
Volume of fuel transported in the 12-month period was 5.9 million metric tonnes, a marginal 3.5 per cent rise from 5.7 million metric tonnes in 2014-15 financial year.
Volumes handled domestically increased by 6.9 per cent from 2.9 million metric tonnes to 3.1 million metric tonnes.
KPC, however, suffered a slim 3.5 per cent year-on-year decline in export volumes to 2.7 million metric tonnes from 2.8 million metric tonnes. The drop was as a result of increased competition on the Central Corridor – the route that connects port of Dar es Salaam to Burundi, Rwanda, Uganda and eastern DRC.
KPC on March 16 introduced a 29.95 per cent discount on transit oil products on its western route in a bid to stave off competition from Tanzania.
Under the rates which took effect in April, oil marketing companies pay a promotional tariff of $41.55 (about Sh4,293) for 1, 000 litres from $59.32 (Sh6,130).
The promotional tariff, Sang said yesterday, was “expected to improve our market share in the regional petroleum trade”.
KPC said the cost-cutting measures implemented during the year resulted in a 7.6 per cent drop in total operating expenditure to Sh11.9 billion from the previous year’s Sh12.8 billion.
The state corporation said the performance underlined its consistent profitability over the years, making it one of the highest contributors to the exchequer and dividends to the Treasury. Corporation tax to the Kenya Revenue Authority during the review year was Sh5 billion, KPC said.
Cash reserves at the close of the financial year remained healthy at Sh11.9 billion, 1.7 per cent more than Sh11.7 billion the year before.
The healthy cash flow position is expected to support planned capacity enhancement projects which include the ongoing Mombasa-Nairobi pipeline re-placement project, KPC chairman John Ngumi said.
“KPC is working on a plan to expand its services to cover at the greater Eastern African region offering transport and storage services including LPG bottling and storage, and utilisation of Lake Victoria to transport products to the region,” Ngumi said in a statement.
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