Kenya: BOC records 6.5% increase in profit

Medical and industrial gases manufacturer BOC Kenya grew its net profit 6.5% to Sh108.3 million in the year ended December, helped by higher sales.

The Nairobi Securities Exchange -listed firm declared a final dividend of Sh2.9 per share, raising the total payout to Sh4.4 per share. It had paid a dividend of Sh4.15 for the previous year.

The new final dividend will be paid on July 19 to shareholders who will be on the May 27 register.

The company’s turnover increased 25.7% to Sh1.3 billion, driven by rising demand for medical oxygen due to an increase of coronavirus patients requiring assisted breathing.

Costs, however, expanded at a faster pace which resulted in smaller margins and the single-digit net earnings growth.

“Profitability was impacted by the imported medical oxygen as the company absorbed some of the product cost increases and supply chain costs in order to contain price increases on customers,” BOC Kenya said.

The company says demand for medical oxygen has since settled at the pre-pandemic levels on the back of reduced Covid-19 infection rates and hospitalisations.

“This has relieved the company of the need to import more costly products,” said the company.

However, with the gradual increasing access to medical oxygen and improvements in oxygen infrastructure in the country, organic growth in oxygen volumes will continue to be realized in the coming years,” BOC Kenya said.

This is the second time the company is announcing full-year results after receiving a joint takeover bid by carbon dioxide manufacturer Carbacid and investment firm Aksaya.

The proposed buyout has remained in limbo after it was opposed in the High Court and at the Capital Markets Tribunal by minority shareholders of BOC Kenya citing undervaluation of the target company by the offerors.

Carbacid and Aksaya announced in November 2020 that they will buy 100% of BOC Kenya at a price of Sh63.5 per share or a total of Sh1.2 billion. The target company’s stock subsequently rose above the offer price and last traded at Sh73.25 apiece.

The offerors have said they are still interested in completing the transaction despite delays in resolving the legal challenges.