- Notes 6 price adjustments and 1 industry margin increase
- Reports 29.7% increase in commercial volumes
Revenue at Engen Botswana Limited increased by 80.5 percent mainly due to the numerous and significant fuel price increases emanating from the Russia/Ukraine conflict.
This is the company that saw its retail volumes decreasing by 10.8 percent and commercial volumes increasing by 29.7 percent.
“There were six price adjustments and one industry margin increase during the year,” says Engen in its newly published financial report for the year that ended 31 December 2022.
Good margin management
“Foreign exchange gains increased from P2.5 million at the end of 2021 to P9.4 million at the end of 2022.”
Engen says it exercised good margin management and cost control throughout the year. “Overall, the group’s performance reflects a net profit after tax of P287.1 million,” the petroleum company says.
“The group performed above expectations on a replacement cost basis, which represents the net profit after tax excluding the effects of inventory revaluations caused by movements in global crude oil prices.
“The replacement cost net profit increased from P110.0 million to P125.1 million from 2021 to 2022 representing a 13.6 percent increase.”
Engen’s crude oil prices increased steadily due to increased demand as a result of the constraints caused by the Russia/Ukraine war.
“The steady increase in crude oil prices resulted in significant inventory revaluation gains throughout the year,” notes the company.
“Despite the difficult and unprecedented trading conditions, both within Botswana and internationally, the group continued to perform very well by growing shareholder value during the course of 2022.”
Engen notes that fuel supply of most products into Botswana from its supply sources was reasonably stable during the course of the year and the company was able to supply its customers without any stock-outs.
“The retail network operated lower than expected mainly due the high cost of fuel which curtailed travel of many consumers,” it says.
Strong brand profile
“The group competed effectively in the market and utilised its strong brand profile and consistent convenience and service offering to retain existing business and attract new customers.”
Meanwhile, the leading petroleum company says the commercial side of the business continued to deliver strong results which exceeded expectations.
“Distributors of lubricants continued to play a pivotal role in the good financial performance of this channel,” Engen notes.
“The Group achieved a good Net Promoter Score which was testimony to Engen Botswana team’s dedication to customer centricity.
“There was very strong price competition in this sector. However, the Group managed to deliver robust Health, Safety, Environmental and Quality (HSEQ) Key Performance.”