KenolKobil petrol station on Limuru Road in Gigiri, Nairobi. The oil
marketer’s share price at the Nairobi Stock Exchange reduced sharply in
the first day of trading since the company made a Sh6 billion loss.
Photo/FILE
NATION
By JOSHUA MASINDE jmasinde@ke.nationmedia.com
In Summary
- Industry experts say that the tight regulation
of the sector by the Energy Regulatory Commission is what has partly
caused the sector to report lower earnings. Some say the pricing formula
used by the ERC leaves very small margins for the operators.
KenolKobil’s stock at the Nairobi Securities
Exchange plummeted to a 15-month low on the first day of trading since
the company announced a Sh6 billion loss on Monday.
The counter, the only loser among the day’s top
movers, witnessed selling pressure as investors moved to offload the
stock following the release of the poor financial results for 2012 with
the share price dropping to Sh9.05.
Market analysts are however optimistic that the
stock will not fall further given that the oil marketer is still in the
profit-making zone and is bound to rebound in future.
“There will be some resistance as some people
might want to buy it (the stock) at this level. It is generally a
profitable company but last year wasn’t so good for the oil marketers,”
an ABC Capital official said. The stock closed trading at Sh9.7.
Following a failed takeover bid by Puma Energy,
the oil marketer is currently pursuing strategic options, including the
search of a potential long-term strategic investors to secure and grow
the value of its share.
Industry experts say that the tight regulation of
the sector by the Energy Regulatory Commission is what has partly caused
the sector to report lower earnings. Some say the pricing formula used
by the ERC leaves very small margins for the operators.
KenolKobil’s gross margins fell to 2.2 per cent
from 5.5 per cent, with expensive inventory carried in its books having a
negative impact on margins.
“Management is further reducing inventories and
pursuing higher margin business lines in the Kenyan operations,”
Standard Investment Bank analysts said.
Total, one of its competitors, reported a Sh202
million loss in the same year, a result that has also subjected its
share at the bourse to selling pressure.
Total blamed the loss on settlement of a claim in a legal case filed against it in a London court.
Led by National Oil Corporation (Nock) and Vivo
Energy, oil marketers have in the past week announced a reduction in the
price of diesel in separate attempts to attract and retain customers as
competition intensifies in the sector.
Nock cut its diesel prices by Sh2 while Vivo, the company that operates Shell, sliced Sh3 off its diesel pump price.
No comments :
Post a Comment