Kenya’s third largest oil marketer KenolKobil has pulled out of Tanzania and the Democratic Republic of Congo markets, perhaps bringing to the fore impacts of the global oil glut.
The oil dealer Wednesday announced its exit from the two markets, leaving it with the Kenyan subsidiary, where it has twice been relegated from market leadership to fall behind Vivo Energy and Total Kenya.
A brief statement sent to the Capital Markets Authority, and copied to the Nairobi Securities Exchange and the Central Depository and Settlement Corporation stated the firm’s pull-out without divulging much.
“We wish to inform the Capital Markets Authority (CMA) that KenolKobil Limited has relinquished all its shareholding interests in Kobil Tanzania Limited and KenolKobil Congo SPRL. Owing to the above said, the two companies shall no longer be subsidiaries of KenolKobil Limited,” read the statement signed by group managing director David Ohana.
The oil marketer, whose financial fortunes have been oscillating between profit and losses, made a comeback to the positive in its results for the year ending December 2014, despite lower sales.
The group’s net profit in the period stood at Sh1 billion, compared to Sh558.4 million the year before. KenolKobil posted yet another net profit of Sh918 million in its results for the first half of 2015, cementing its stability in the market.
The results would see the oil dealer award an interim dividend of 10 cents, a gesture coming for the first time in four years.
Yesterday’s move to pull out of the two subsidiaries, however, casts doubts on its strong comeback and the group CEO’s opinion on the subsidiaries last year that pointed to improving fortunes from them.