The Kenya Pipeline Company (KPC) has announced a KES 10 billion profit before tax for the financial year ending 30th June 2024, a 32% increase from the KES 7.6 billion recorded in the previous fiscal year.
- •This performance comes as the state-owned entity prepares for a potential listing on the Nairobi Securities Exchange (NSE), a move that will provide the much needed boost to Kenya’s capital markets.
Financial Performance
- •KPC’s revenue grew by 15% to KES 35.4 billion, up from KES 30.9 billion in the previous year, driven by increased sales volumes and favorable foreign exchange rates.
- •The company’s total throughput volumes rose by 6% to 9.1 million cubic meters (M3), with export volumes surging by 12% to 4.7 million M3.
- •Domestic throughput volumes also saw a slight increase of 0.1% to 4.5 million M3, reflecting KPC’s enhanced operational capacity and commitment to meeting customer demand.
KPC’s Managing Director, Joe Sang, revealed that KPC has completed the acquisition of Kenya Petroleum Refineries Limited (KPRL), “a move that underscores the company’s strategic focus on leveraging KPRL’s fuel storage assets to strengthen Kenya’s position as a regional oil and gas hub.”
In addition to its core business of transporting and storing petroleum products, KPC is exploring alternative revenue streams, including Fiber Optic Cable (FOC) services, the Morendat Institute of Oil and Gas (MIOG), and investments in LPG. KPC says these initiatives are expected to further diversify the company’s income sources and enhance its profitability.
Kenya Pipeline’s Anticipated IPO
The release of KPC’s strong financial results comes amid growing momentum for its public listing. The government, through the National Treasury, recently confirmed discussions on an Initial Public Offering (IPO) as part of its broader privatization agenda.
Kenya Pipeline’s potential listing is part of the Ruto administration’s wider privatization program aimed at offloading non-strategic state corporations to improve efficiency, attract investment, and ease the government’s fiscal burden. The Privatization Act 2023, signed into law by President William Ruto, seeks to expedite the sale of state-owned enterprises through streamlined processes and multiple divestment strategies, including IPOs and private placements.
However, the privatization program has faced delays due to legal battles, political opposition, and concerns over asset valuation. Last year, the High Court ruled that the government must conduct further stakeholder consultations before proceeding with the sale of certain assets.
Despite these challenges, there is renewed optimism that privatization efforts will gain momentum in 2025, particularly with opposition leaders now cooperating with the government.
A Boost for the Nairobi Securities Exchange
The listing of KPC could provide a much-needed boost to the NSE, which has struggled to attract new listings over the past decade. The IPO would increase market capitalization and offer retail and institutional investors an opportunity to invest in a profitable state entity with a strong regional footprint.
Kenya Pipeline controls 90% of fuel transportation to Uganda and its growing market share in Rwanda. The company is also exploring the establishment of a trading hub in Mombasa to facilitate petroleum imports and distribution across East Africa.
