Kenol Kobil Limited announced results for the full year 2014 with the following highlights:
- Net sales declined by 16.7 percent from KES 109.69bn in 2013 to KES 91.32bn in 2014 while cost of sales dropped by 18.2 percent to KES 86.26bn in 2014.
- Gross profit rose by 18.4 percent from KES 4.27bn in 2013 to KES 5.05bn in 2014.This was as a result of effective inventory management and focus on high margin benefits.
- Administration and operating cost declined by 25.5 percent, which led to faster growth in EBITDA, which grew by 23.8 percent to KES 3.77bn in 2014.
- Net finance costs went down by 22.0 percent from KES 1.63bn to KES 1.27m in 2014.This was attributed to reduced borrowings which declined by 29.9 percent to KES 10.41bn in 2014, as well as lower borrowing rates.
- Shareholders’ funds grew by 10.0 percent from KES 6.67bn in 2014 to KES 7.33bn in 2014.
- The company recorded a 95.4 percent growth in Profits after tax from KES 558.42mn in 2013 to KES 1.01bn in 2014. This translated to a 9.2 percent increment in EPS to KES 0.74 in 2014.
- The company was negatively impacted by a 179.1 percent increase in currency translation difference from KES 80.41mn to KES 224.44mn on the Statement of Comprehensive income during the year.
- The Company declared a dividend of KES 0.20 per share, an increase of 100.00 percent from the previous dividend of KES 0.10.
Our view
Cost Management: We expect the company to maintain low operating costs going forward thereby improving the EBITDA margins. Operational overhaul and severe cost management will improve the company’s top line performance.
Sales growth: Increased distribution channels through acquisition of new petrol service stations together with the fall in pump prices will drive overall growth in sales.