Petroleum company, Puma Energy Zambia Plc, announced a profit before tax of K78.27 million at half-year 2019 despite a 3.8% dip in volumes compared to its half-year performance.
“The Company recorded for the half-year ended 30 June 2019 a profit before tax of K78.27 million compared to K61.48 million recorded in the previous financial year”, read the review of the final results issued by Company Secretary Kalunga Lutato for the first half of 2019 published on SENS on 13th September 2019.
With EBITDA surging by 18%, the Puma management team are defying economic odds that has seen diminishing purchasing power following accelerating inflation which now hovers above the Central Banks target range of 6 to 8% and an exchange rate that weakened against the greenback by more than 20% in the half-year under review.
According to the company, the key highlights of the financial performance for the period were as follows:
- Volumes for the period reduced by 3.8% compared to the same period in 2018. This was primarily due to underperformance on lubricant sales and aviation. This is expected to improve in the second half of the year.
- During the period under review, the Company invested over K9.292 million in capital projects mainly in its Retail Network and this will increase in the second half of the year.
- During the period under review, the Kwacha depreciated by about 30% against the United States Dollar from K9.9 in 2018 to K12.88 in 2019.
Building a strong network of fuel outlets is critical in a market that has seen investment in the road infrastructure that has made access to filling stations more pertinent. However, the management team will also be looking at its cash flow statement that saw a sharp decrease in net cash from operating activities signaling liquidity constraints. This is the reason why the board is not recommending a dividend at this point which will be a disappointment to shareholders.
The company remains bullish on prospective business for later in the year targeting key business segments coupled with positive strategic initiatives being put in place which they envisage will aid in increasing sales volume performance later in the year. Furthermore, they have a strong investment program lined up that they believe will provide added benefits to the business that will ensure it remains a key player in the energy sector.