Thursday, November 30, 2023

Engen posts stellar results after improving fuel supplies

Engen’s performance greatly improved in 2013 due to efficient fuel supply┬ásystems and the opening of three new retail outlets┬áin the second quarter┬áof the year. The group’s performance is said to have far┬áexceeded pre-construction projections.

The Commercial Business Division continued to deliver robust results, contributing significantly to the success of the Group. The division in particular benefited from increased activity in the mining sector. A close look indicates that the company’s fuel sales increased markedly, from 279 million litres in 2012 to 289 million litres for the current year. That┬á┬ádevelopment pushed revenue for the year to P2.6 billion, a 16.7 percent increase on the previous period, while operating profit moved up by 9.6 percent to reach P173 million. Engen’s overall net profit after tax rose by 6.6 percent to reach P130 million. New distributors were appointed for the gases business as well as the lubricants segment. Both of them contributed strongly to overall results.

Information contained in the company’s latest annual report shows that this year, for the first time, a provision of P4.6 million was made for health, safety and environment costs. These costs are associated with environmental remediation due to spillages, and are estimated based on the probability of spillages occurring.

“Botswana’s economy is displaying signs of recovery, leading us to┬áexpect that 2014 will be an even bigger and better year for Engen. The Group is expanding its brand and cementing its position within Botswana. We have already seen good growth in the business’s focus areas, and our expectation is that this upward trend will continue,” stated the chairman Shabani Ndzinge.
Engen Botswana is said to be vulnerable to currency movements and the company has chosen to employ a hedging strategy.┬á┬áDuring the year under review, Botswana’s Pula strengthened against the South African Rand.

“As a result of this movement, as┬áwell as our hedging strategy, foreign┬áexchange gains increased from P5.1 million at the end of 2012 to P9.7 million at the end of 2013,” he stated.

Ndzinge pointed out that a major development during the period under review was the formation of Botswana Oil Limited, a state owned company with the mandate of maintaining strategic fuel reserves. He added that the company is mandated to develop alternative supply routes and facilitate citizen economic empowerment in the petroleum sector.

┬á“The new company will develop infrastructure which will allow the country to increase fuel reserves from 18 days’ supply to 60 days,” he said.


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