TotalEnergies profit jumps 14 percent on lower tax bill
Oil marketer TotalEnergies Marketing Kenya has posted a 10.8 per cent drop in earnings to Sh2.44 billion from Sh2.73 billion for the year ended December 2022.
TotalEnergies Marketing Kenya Plc has posted a 14.09 percent growth in net profit to Sh938.5 million in the half year ended June attributed to a reduced tax burden.
The company's net profit rose from Sh822.6 million recorded a year earlier.
TotalEnergies' net revenue rose 8.7 percent to Sh61.6 billion from Sh56.6 billion but cost of sales grew faster at 10.2 percent to Sh56.9 billion from Sh51.6 billion.
This resulted in the gross profit falling to Sh4.7 billion from Sh5 billion. The Nairobi Securities Exchange (NSE)-listed firm incurred a lower tax charge of Sh316.8 million –equivalent to 25.2 percent of the pre-tax profit— and led to the net earnings growth.
The company had paid taxes of Sh442.9 million amounting to 35 percent of the pre-tax profit the year before.
The standard corporate income tax rate in Kenya is 30 percent but the actual amount paid by a company can vary based on various factors, including allowable deductions and deferred taxes.
The oil marketer's operating expenses grew 2.7 percent to Sh3.8 billion in the review period from Sh3.7 billion the year before.
Inflation impact
"The increase in operating expenses is majorly attributable to inflation impact on local costs," TotalEnergies said in a commentary accompanying the results.
Net finance costs almost quadrupled to Sh1.52 billion from Sh396.5 million, with the company attributing this to increased cost of borrowing and higher working capital requirements.
The company did not have any bank overdrafts in the period under review which reduced its current liabilities to Sh32.5 billion from Sh41.3 billion. It had overdrafts of Sh5.5 billion a year earlier.
Foreign exchange gains rose to Sh674.2 million, reversing a forex loss of Sh468 million the year before in what the company said was caused by appreciation of the Kenya Shilling against US dollar.
Additional income from investment and other business activities, including rental revenue rose 37.5 percent to Sh1.23 billion.
"Other income increased to Sh1.23 billion from Sh895 million majorly due to investing activities, increased revenues from diversified investments in shops, food and services (SFS) and income from partnerships with third parties in the period," TotalEnergies said.
The value of government debt securities rose to Sh7.8 billion from Sh7.7 billion. The government has been issuing bonds to oil marketers to settle amounts due to them under fuel subsidy.
The company did not recommend an interim dividend in line with its tradition. It had made a payout of Sh1.92 per share or a total of Sh336.1 million for the year ended December 2023. The dividend was a rise from Sh1.31 per share or Sh229.3 million paid in the prior year.
