Demand for medical gases lifts BOC profit

BOC Managing Director Marion Mwangi. The firm’s turnover rose to Sh1.1 billion. [Wilberforce Okwiri, Standard]

The increased demand for medical oxygen saw BOC Kenya post 82 per cent rise in net profit for the financial year ended December 2020.

The full year net profit stood at Sh101.6 million - nearly doubling from Sh55.9 million posted the previous year. Turnover rose 12.7 per cent to Sh1.1 billion up from Sh975 million in 2019, its recent financials showed.

“The upside in the results for the full year was primarily from medical gases, a revenue stream that has shown consistent growth over many years due to increased investments in both public and private sector healthcare facilities,” the company said.

BOC Kenya, the country’s largest supplier of industrial, medical and special gases, has seen a peak in business with oxygen being key in the fight against Covid-19 which attacks lungs, making it hard for victims to breathe without assistance.

BOC Kenya, however, said it incurred higher costs of importation in supplementing local production of medical oxygen that it could not shift to customers.

However, it noted that the performance delivered mixed returns with demand for industrial oxygen (other industrial gases, equipment and other products) being depressed.

“The industrial gases sector continues to be a challenging one because it includes the price and income-sensitive mass market (jua kali) and it is also the sector most affected by illegal filling of the company’s cylinders. This issue is being addressed,” said BOC.

The performance is on the back of an uncertain Sh1.2 billion takeover deal by Carbacid Investments in a joint partnership with Aksaya Investments. The deal is in limbo at the Capital Markets Tribunal after Ngugi Kiuna, a minority shareholder with a 7.6 per cent stake filed an appeal.

BOC Kenya board had refused to recommend the offer for acceptance by shareholders citing undervaluation. The independent adviser for the deal, Dyer and Blair, put its “fair” value at Sh91.76 billion, 44.5 per cent higher than the offer prices.

However, the majority shareholders of the UK-based BOC holdings with 65.38 per cent stake have already agreed to the takeover bid.

A source at CMA confirmed that the tribunal had no “quorum”, putting further uncertainty on the deal touted to create a giant gas manufacturer.