Fuel company, Engen Botswana saw its net profits in the first half of the year grow significantly amid a gloomy economy and dwindling oil prices.
During the half-year period ended June 30, 2015, the Botswana Stock Exchange (BSE) listed petroleum firm recorded a 25 percent increase in gross profit to P148 million from P118 million in the same period last year.
Engen Botswana’s managing director, Chimweta Monga stated that the growth was mainly due to the increase in government-controlled industry margins in December 2014 and increased sales volumes.
The company’s operating profit increased by 47 percent to P105 million this year from P73 million last year.
“This was due to an increase in the wholesale selling margin, increased sales volumes and controlled expenditure, which declined by 4.4 percent,” he said.
Monga also noted that international crude oil prices increased during the period under review and also contributed positively to the net profit of the group.
Earnings per share increased from 34.6 thebe per share during the same period in 2014 to 53.9 thebe per share for the period under review.
However, turnover decreased by nine percent from P1.2 billion last year to P1.1 billion this year. Monga noted that this was as a result of decreases in controlled selling prices in December 2014 and February 2015.
He stated that the petroleum sector continues to grow with a number of new retail facilities being constructed during the period under review.
He said the company continued to grow sales volumes and that it significantly improved its financial performance despite an increase in the level of competition.
“The business fundamentals remained robust and the company continued to generate healthy levels of cash from operations,” said Monga.
With stable international crude oil prices, the managing director was adamant the company’s performance will continue to be strong for the remainder of the year.
He further said the company was involved in a number of promotional activities in the first half of the year, which resulted in seven percent sales growth of volumes over the previous year.
According to the MD, three new retail outlets were constructed with one streaming in February and the other two expected to stream in the third quarter of 2015.
He said product supplies from traditional sources remained stable resulting in a reliable flow of fuel to retail facilities in Botswana.
“Our strong brand and unique convenience offering continued to be a valuable differentiator in the market and contributed to the successful financial performance in the period under review,” said Monga.