Engen, the third largest petroleum company’s profits soared by seven percent to P 921 million as a result of the sky-rocketing crude oil prices.
According to the full year result up to the end of March 2008 the balance-sheet was seven percent better from P 859 million periodÔÇö on ÔÇôperiod and operating profits stood at P 128 million while profit before tax surged to P 127 million against P 65.5 million like-on-like.
“The increase on receivable is due to an increase in the slate refund from government coupled with an increase in other receivables due to increasing crude oil prices. The increases in payables are also due to the general increases in prices. The increase in differed tax is mainly due to the increased additions on property, plant and equipment and also reduction in foreign currency losses,” the company said in a statement this week.
Earning per shareÔÇö- the magical barometer for companiesÔÇö- ended the period at 64.3 thebe from 34 thebe in the past year giving shareholders’ value an 89 percent increase as measured against the two periods.
The company further stated that the decreases in distribution and marketing expenses were attributed to recovery of bad debts provided for the previous period.
However, inflationary spikes hit hard on the balance sheet as inflation moved from six percent to double digits.
“Increases in administrative expenses are due to inflationary pressures and expansion of the staff structure to improve business controls. The system of regular payments for imported products has assisted in reducing foreign currency exposure resulting in a decrease in foreign currency losses,” the company said.
However, the company, whose business has largely been supported by the commercial sectorÔÇöespecially the minesÔÇö said it is aggressively working on plans to increase its foot-print in the retail section.
The company largely benefited from the international fuel price spikes which the crude oil price per barrel reaching US$ 130 for the first time in history, but commentators were saying this week that it could go as high as US $250 per barrel.
The company praised the support that it got from the commercial sector saying that it led to “good volumes and profitability” despite an intensive competition waged by its competitors.
In the coming weeks, competition is expected to intensify on the commercial front as news mines in the north are positioning themselves to open. African Copper and DiamondEx, the Tswapong diamond mining company’s fuel tender is coming to a close and petroleum companies are already burning their mid night oil over it.