BOC Kenya expects net earnings for the Full Year 2019 to be at least 25 per cent lower compared to the previous year 2018.
According to the Board of Directors, BOC has witnessed a depressed demand for gases mostly from SMEs. The board notes that SMEs are under distress in the current operating economic environment.
BOC says high local energy costs have impacted production costs leading to reduced demand for gas by firms.
Additionally, public sector customers have stayed with BOC’s unpaid invoices for periods above the allowed credit period. The firms says this has created additional doubtful debt provisions.
BOC has also witnessed unanticipated downtime in the gas production plant to undertake emergency repairs. This coupled with an outage of key raw materials due to constraints on part of a key overseas supplier have led to reduced gas production.
The board thus notes that these factors will lead to a reduction in net earnings for the year ending 31 December 2019.
However, BOC is pursuing alternative revenue streams while streamlining production to ensure efficiency and increased productivity.