Engen profits jumps astronomically
Engen Botswana net profit grew by 110 percent to P387 million in the half year period ended June 2022 as the business conditions improved after ease of Covid 19 restrictions and the significant increase in global crude oil prices.
During the half year period, the BSE listed company received an amount of P537 million from government slate compared to P151 million in the same period last year. Commenting on the published results Engen Botswana Acting MD, Brian Sameke stated that the increased business activity enabled the company to significantly improve its performance when compared to the same period last year. “The commercial sales channel grew by 56 percent compared to the previous year. This performance was mainly attributable to the acquisition of new supply contracts which offset some of the effects of Covid- 19.” He highlighted that the lubricants sales channel continued to perform well albeit with challenges in the rising costs of base oils and additives. These increases in the cost of goods sold affected margins negatively. “It is expected that this performance will be enhanced during the second half of the year.”
However the company’s performance of the retail sales channel of the business declined by nine percent in comparison to the same period last year due to a general reduction in disposable income caused by high inflation and some areas of the economy that have not yet recovered from Covid- 19. “Inflation for the first time in many years breached the 12 percent mark rising above the Bank of Botswana upper limit of the target range. 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”.
Sameke said there were no new retail outlets that were streamed in this period, but they expect that there will be two new industry service stations before the end of the year. “This is in line with our strategic intent to leverage on a strong retail position. It is expected that the performance of this sales channel will improve for the remainder of the year.”