eBusiness Weekly
Kudzanai Sharara
Government this week announced plans to list 12 state-owned enterprises on the Zimbabwe Stock Exchange, among them Petrotrade, a company that supplies petroleum products into the local market.
The move is part of Government’s efforts to restructure State-owned enterprises (SOEs) some of which have resulted in, fiscal risks to the local economy through debts assumption by central Government, re-capitalisation requests, and called-up guarantees.
But Petrotrade, which has been targeted for partial privatisation, seem to be one of the few State- owned companies that have been profitable at least in the last two years.
Asset base and revenue level
As at December 2017, the company had a $68,3 million asset base with fixed assets making up $32,4 million while the balance of $35,8 million is in current assets.
Non-distributable reserve for the company are worth $14,3 million while capital reserve amounted to $25,2 million, with retained earnings at $9,5 million.
As at end of December 2017, Petrotrade had a cash position of $8,9 million up from $7,3 million prior year comparative
In its last set of financials Petrotrade’s revenue increased 29 percent to $138,4 million up from $106 million prior year comparative.
Sales for main fuel increased to 109,8 million litres in 2017 from 91 million litres in 2016.
Other revenue sources for the company, apart from sales of main fuels, include revenue from its fleet of fuel tankers for transportation of fuel from Depots and clients.
Transport fees charged for such services for 2017 amounted to $3,2 million.
An additional amount of $1,6 million was recorded from other revenue streams including property rentals, investment, commissions and insurance re-claim.
According to chief executive officer Godfrey Ncube the firm had 9 percent market share in 2017, making it the 4th largest fuel retailer in a market that is very competitive and dominated by Total, Zuva and Puma.
These three players, according to Petrotrade management are very much aligned to their international strategic partners.
The company is one of the few profitable state owned enterprises having reported profit after tax of $3,7 million in 2017 up from $1,2 million in 2016. Wholesale fuel margins in 2017 remained at 6 cents per litre throughout the year.
Route to market
The company operates two market segments, the retail segment and the commercial segment. The commercial department concentrates on bulk sales to commercial customers whereas the retail department runs company service stations and manages dealers throughout the country.
Of the 109 million litres sold by Petrotrade, 54 million were sold through the commercial department, whose main customers include parastatals and government related institutions. Commercials sales made up 49 percent of total sales.
The retail marketing department distributed fuel products through service station network. The operates from 24 sites of its on, and 29 dealer sites while 34 more are 3rd Party Sites. At the close of 2017, the company had four service station projects under construction.
Sales from retail sites increased by 23 percent to 55 777 091 litres in 2017 resulting in gross sales volume contribution of 51 percent.
If successfully listed, Petrotrade will become the first energy sector stock to be listed on the local bourse.
