Engen profit P33 million lower

Engen Botswana Limited expects a profit before tax for this year to be thirty-three million pula (P33 million) lower than last year. The company’s Chairman, Dr. Shabani Ndzinge has revealed.

The thirty-three million pula (P33 million) difference represents roughly eighteen percent (18%) lower returns. The preceding year during the same period (December 2019), Engen Botswana recorded approximately one hundred and eighty million pula returns. However, for the year ended December 2020, a profit before tax of about one hundred and forty seven million pula (P147 million) was recorded.

“Accordingly, the shareholders of Engen Botswana Limited are advised that the profit before tax for the year ended 31 December 2020 of P147.2 million will be 18.3% or P33 million lower than the P180.2 million reported for the year ended 31 December 2019.” Ndzinge revealed.

It is a common knowledge that the filling stations normally operate on a twenty-four hour (24hrs} for the whole week. However, due to effects of Corona Virus Disease (COVID-19) pandemic lockdowns and curfews were implemented. Implementation of lockdowns and curfews consequently affected filling stations operations as they could not trade as before.

As if lockdowns and curfews were not enough, there was a sharp reduction in crude oil prices globally. The reports have it that by “20 March 2020, the spot price West Texas Intermediate (WTI) crude oil decreased by sixty-five percent (65%) from its price on 6 January 2020”. On the other hand, Western Canadian Select (WCS) crude oil price fell by seventy-two percent (72%).

“This is mainly attributable to the effects of the Covid-19 lockdowns which reduced business activity nationally and the significant decline in global crude oil prices during the year. As a result, the gross profit has declined by 21.2% from P295.9 million to P233.1 million from 2019 to 2020 respectively.” Ndzinge indicated.

However, the Group performed above expectations on a replacement cost basis. The replacement cost net profit increased from forty-seven point five million pula (P47.5 million) to ninety-four point six (P94.6 million) from 2019 to 2020 representing a whooping ninety-nine point two percent (99.2%) increase.