Engen profits jumps astronomically
Engen Botswana recorded a quantum leap profit increase to P174.6 million due to improved business conditions after government eased movement restrictions and the significant increase in global crude oil prices during the first half of 2021.
Commenting on the published financial results, Engen Managing Director, Chimweta Monga highlighted that the streaming of new service stations also contributed to the increase in volumes. The company’s net profit before tax increased by 729 percent to P132.2 million. “The performance of the retail sales channel of the business improved by 25 percent in comparison to the same period last year due to less restrictive Covid- 19 protocols which did not include a complete shutdown of the economy.”
Last year, the company recorded subdued profit before tax of P29. 9 million.
The company also saw significant performance in retail due to the streaming of a number of “new to industries” retail outlets. Monga pointed out that this is in line with the company’s strategic intent to leverage on a strong retail position.
“It is expected that the performance of this sales channel will continue to flourish for the remainder of the year.”
The commercial sales channel also grew by four percent compared to the previous year, mainly attributable to the acquisition of new supply contracts which offset some of the effects of Covid- 19. Monga explained that the lubricants sales channel continued to perform well and it is expected that this performance will be enhanced during the second half of the year through supply chain process improvements that were implemented towards the end of the second quarter, resulting in potential lower cost of goods sold.
The company also received an amount of P150.9 million from Government compared to a slate over recovery position of P10.7 million in December 2020.
He said petroleum industry continued to be affected by the constrained movements arising from the measures taken in an effort to control Covid- 19. Crude oil prices steadily rose resulting in significant inventory revaluation gains accruing during the period.
During the period, Inflation breached the 8 percent mark, rising above the Bank of Botswana upper limit of the target range for the first time in many years. This was due to increases in VAT, and fuel prices. It is expected that inflation will continue to be high for the remainder of the year.