TOTAL KENYA (TOTAL) have released their results for the half year period ending 30th June 2011
Net Profit was down 73.6% to Kshs. 79.7 Million from Kshs. 302.3 Million
Gross Profit declined 23% to Kshs. 2.63 Billion
The results pale in comparison to KenolKobil’s 1st Half 2011 results which saw Profit After Tax rise by 82.9% to Kshs. 2.1 Billion, no doubt receiving a boost from its subsidiaries. Many would love to see the performance of KenolKobil’s Kenyan unit, but management declined to release the figures showing the contribution of each country by profits.
Gross Profit Margins was down 2.2% to 4.54%. Its fellow listed oil marketer had Gross Profit Margins of 8.1%
Total Assets were up 17.7% to Kshs. 35.76 Billion
HALF YEAR 2010 Kshs. | HALF YEAR 2011 Kshs. | % CHANGE | |
TURNOVER | 39 BILLION | 44.72 BILLION | +14.7% |
COST OF SALES | 28.6 BILLION | 36.3 BILLION | +26.8% |
GROSS PROFIT | 2.63 BILLION | 2.03 BILLION | -23% |
GROSS PROFIT MARGIN | 6.76% | 4.54% | -2.2% |
DEPRECIATION AND AMORTISATION | 444.7 MILLION | 530 MILLION | +19.2% |
OPERATING PROFIT | 1.02 BILLION | 515.5 MILLION | -49.7% |
NET FINANCE COSTS | 543.3 MILLION | 396 MILLION | -27.1% |
NET PROFIT | 302.3 MILLION | 79.7 MILLION | -73.6% |
The company attributed the reduced performance to various challenges facing the oil industry in Kenya, key among them the impact of price controls that were introduced in December 2010.
TOTAL also blamed inefficiencies in the fuel supply chain
Sales Volumes were down 13.7% from 493 KMT to 425 KMT. The rise in Turnover was as a result of an increase in product costs due to high international oil prices
Other Income rose by 790% from Kshs. 40.5 Million to Kshs. 360.4 Million, including Kshs. 200 Million from the disposal of company assets as was stipulated by the Government of Kenya during the acquisition of the Chevron business
Finance costs decreased due to lower average interest rates compared to the same period in 2010
The weakening of the Kenya shilling played its part resulting in TOTAL’s operating expenses rising by 11% due to foreign-currency denominated costs
The company still has a Medium Term Loan of Kshs. 702 Million in its books. Short Term Borrowings shot up by 141% to Kshs. 14.2 Billion from Kshs. 5.9 Billion. This was to finance higher Working Capital requirements as a result of the rise in International oil prices
Cash generated from operations is at negative Kshs. 8 Billion. The closing cash position for the period is Kshs 14.1 Billion compared to Kshs. 10.5 Billion as at 30th June 2010
TOTAL paid Kshs. 396 Million in interest, from Kshs. 543 Million in the corresponding half in 2010
Management blamed the Energy Regulatory Commission for underestimating costs in their formula for determining maximum pump prices and the lag effect between rising international prices and the period when they are recognized in the formula
The short-term to medium-term picture looks gloomy for TOTAL and its Managing Director, Alex Vovk, is hoping for a “reasonable solution to be implemented by the Government to address shortfalls in the pricing formula”
The firm also continues to service loans it took for acquiring the Chevron business
TOTAL KENYA’s market share now stands at 22.6% from 27.6% in June 2010
Half Year Earnings Per Share is at Kshs. 0.46/=
At the price as at 25th August 2011, the share is trading at a Forward Price Earnings ratio of 23.4
Meanwhile, assuming a Full Year Earnings Per Share of 1.95/= for KenolKobil, it is trading at a forward P.E of 5.4
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