BOC Posts Sh339 Million Pretax Profit

BOC Kenya has today announced a Sh399.7 million pretax profit for the 15-month period ending December 31, 2007.

This represents a 20 per cent increase up from Sh333 million recorded in 2006.

The results cover a 15-month period following the company's adjustment of its financial year-end from September 30, 2006 to December 31, 2007. This follows the acquisition of UK's BOC Plc Group - the then BOC Kenya Limited holding company, by Linde Group Limited in September 2006.

The industrial and hospital gas company attributes the increase to improved market performance and aggressive marketing in its Uganda and Tanzania subsidiaries.

The company's turnover rose by 36 per cent to Sh1.5 billion up from Sh1.1 billion recorded in 2006.

Managing director, Mr John Kariuki, however announced that the firm had lost 15 per cent in sales opportunities due to the post-election crisis.

Mr Kariuki told an investor briefing in Nairobi that the political upheaval affected its distribution network and impacted negatively on the manufacturing sector across the East African bloc.

"In Kenya, some companies had put their investment decisions on hold and suspended projects while most of BOC's customers were not operating at full capacity," he said.

During the period under review, earnings per share went up by 18 per cent to Sh13.62 from 13.62 to Sh11.57.

The board of directors recommend a final dividend of Sh4.25 per share and a special dividend of Sh2 per share amounting to Sh122 million to be paid on May 16.

Other factors that contributed to the company's improved performance include market reception of its Miller range of welding machines, improved supply chain process and sustained operational efficiencies.

The steady economic growth continued to impact positively on the business with the increase in turnover supported by recovery in key sectors of agriculture, tourism and mining in Tanzania.

The company plans to expand its air separation unit in the next 18 months. The firm will subsequently replace the unit installed in 1985 with a machine that will meet the market demands in the next 15 years.

The company still faces challenges of prolonged shortages of Argon and Liquefied Petroleum Gas and an increase in input costs of steel, fuel and power.

BOC said that the dilapidated road infrastructure has extensively affected its deliveries in the East African bloc "We have continually sought ways of mitigating these challenges, through efficiency improvement initiatives," Mr Kariuki said.