BOC, which has operated in Kenya since 1940, produces and supplies industrial, medical and special gases. FILE PHOTO | NMG BOC Kenya’s net profit jumped 88 percent in the year ended December, partly helped by increased demand for oxygen in hospitals caring for coronavirus patients who need assisted breathing.
The Nairobi Securities Exchange-listed firm posted a net income of Sh105.2 million in the review period compared to Sh55.9 million a year earlier.
This came as sales increased 12.5 percent to Sh1 billion from Sh975.8 million. BOC’s financial performance in the review period is based on unaudited management accounts.
The disclosures have been made in relation to the company’s proposed buyout by Carbacid Investments Plc at a price of Sh63.5 per share or a total of Sh1.2 billion.
“The Covid-19 pandemic has had an impact on BOC Kenya as it has led to an increased demand for oxygen and therefore an opportunity for volume growth,” Dyer and Blair Investment Bank, the independent advisor hired to review Carbacid’s offer, said in its report.
“Due to increased demand, this has resulted in the company supplementing local oxygen production with expensive oxygen imports.”
Dyer and Blair added that oxygen is among the medical gases that will drive BOC’s revenue growth in the medium term from both volume growth and price increments.
Despite the higher profit posted by BOC in the year ended December, the company projects that it will not pay a dividend. BOC’s management projects that payouts to shareholders will resume in 2021 at a rate of 80 percent of net earnings.
The parent company of the medical and industrial gases manufacturer, BOC Holdings, has committed to sell its 65.38 percent stake to Carbacid.
In a rare move, however, BOC’s board of directors has opted not to recommend the company’s takeover by Carbacid.
The decision came after Dyer and Blair declared that Carbacid’s offer undervalues BOC by 30.8 percent.The investment bank says BOC is worth at least Sh91.76 per share or an aggregate of Sh1.7 billion. BOC’s board asked minority shareholders to make up their own mind on the merits of Carbacid’s offer.
