Increased piracy cases hurt BOC Gases profits

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BOC Gases pre-tax profit halved to Sh115 million for the year ended December 31, 2010 due to increased piracy cases on the high seas.

The industrial gas supplier’s profit before tax stood at Sh114.7 million during the period compared to Sh231.68 million in 2009.

According to trade results announced last week, revenue for the period was Sh1.16 billion, down 10 per cent from Sh1.29 billion in 2009.

Managing Director Maria Msiska said turnover dropped due to shortages occasioned by piracy-induced delays in product delivery.

Piracy off the Somali Coast has driven up cost of shipping goods and increased delays in delivery.

“The board believes restructuring actions previously announced as well as more strict controls are prudent and in the best interest of all stakeholders,” she told an investor briefing in Nairobi last week.

Msiska said this year’s growth outlook for the region is encouraging, as is the Government’s infrastructure investments, which should firm up demand for welding gases and other BOC Kenyaproducts.

“We are consequently upgrading our key production facilities which will lead to efficiencies and improved product availability,” she said.

Regional expansion

Msiska also said the firm is eyeing expansion into Southern Sudan after the country voted overwhelmingly for independence in a recent referendum. BOC, a subsidiary of Germany’s Linde, said it expected better performance this year, after it cut costs in the second-half of the year under review, following a depressed first half.

According to the financial results, total dividend per share for the year went up 38 per cent to Sh9.40 after it recommended a final dividend of Sh1.40 plus a Sh6 special one-off dividend. The Company paid a Sh2 interim dividend in October.

“The special dividend is a repayment of excess cash to reflect the projected capital and operational cash flow requirements of the business,” she said.

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