Kenya's BOC Half-Year Net Profit Up 23% on Lower Costs

AFRICAN STOCKS AND FINANCEAugust 26, 2024 at 12:13 PM UTC

TLDR

Kenya-based BOC reports a 22.6% increase in net profit to Sh61.7 million despite an 11% drop in revenue.
Profitability boost attributed to significant overhead cost reduction from Sh194.2 million to Sh165.7 million.
Management interventions focused on cost control in distribution, selling, and administration contribute to improved profitability.

Kenya-based BOC, a manufacturer of medical gases, reported a 22.6% increase in net profit to Sh61.7 million for the six months ending June 2024, up from Sh50.3 million the previous year.

This profit boost was achieved despite an 11% drop in revenue, which fell from Sh589.9 million to Sh523.4 million, mainly due to the conclusion of some donor-funded projects. The company attributed its improved profitability to a significant reduction in overhead costs, which decreased to Sh165.7 million from Sh194.2 million.

BOC cited "deliberate management interventions" aimed at cost control, particularly in distribution, selling, and administration, as key factors in offsetting the revenue decline.

Key Takeaways

BOC anticipates a gradual increase in demand and access to medical gases, driven by infrastructure projects completed last year. The company expects profitability to improve in the second half of the year due to anticipated new projects, price revisions on expiring tenders, and benefits from a reduction in electricity tariffs. Reflecting its positive outlook, BOC has declared an interim dividend of Sh2.50 per share for the period, a notable change from last year when no dividend was declared. The dividend will be paid around October 14, 2024, to shareholders on the register as of September 20.

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