KenolKobil plans to be debt-free by end 2014

By Regina Manyara

KenolKobil wants to focus on strengthening the existing ventures rather than buying new companies in a move aimed at reducing its debt.

The firm’s debt has declined to 13.6 billion shillings as of June 30 this year, down from 15.4 billion shillings as at December last year.

KenolKobil returned to profit last year after slashing costs and reducing its workforce by 41 percent.

The firm’s level of debt relative to equity, dropped to 62 percent as of June this year from 67 percent in the previous year.

KenolKobil Managing Director David Ohana said in April that the company wants to be debt-free by the end of the year.

KenolKobil has opened 20 service stations in Burundi over the past year, making a total of 34, while in Rwanda, it has 56 facilities, compared with 38 in 2013 arguing that the returns were high in this markets unlike back home.

This comes at a time when Kenya’s oil and gas discovery is geared to transform the petroleum industry within the country as well as regionally.

Ohana says the company wants to focus on existing ventures rather than buying companies so as to reduce debt.

Currently, KenolKobil has company a market value of 12.4 billion even after it ceded its position as Kenya’s second-biggest retailer of petroleum products by sales to Vivo Energy.

Total Kenya has the largest market share. Ohana says KenolKobil is keen to be the market leader in profitability and not volumes sold.

However, Ohana is confident that KenolKobil will again command the larger piece of the market share especially following its investments in Burundi and Rwanda.