Carbacid Investments has posted a 17.9 percent rise in net profit to Sh485.16 million in the half-year ended January 2024 on increased sales of carbon dioxide in the new regional markets.
The profit rise from Sh411.65 million posted in the preceding similar period last year came in the period Carbacid’s turnover grew by 26.3 percent to Sh1.08 billion from Sh855.53 million.
“Turnover for the six months increased by 26 percent over the same period last year. The growth is attributed to new markets for liquid carbon dioxide within the East and Southern Africa region,” said the Nairobi Securities Exchange-listed firm.
Carbacid is the major producer of carbon dioxide, which is used to make fizzy beverages like soft drinks, among other applications.
Operating profit had risen by nearly a third but Carbacid says operating expenses grew by more than a quarter on the back of price increases on input costs and higher debt servicing costs in the period the shilling was losing ground against the dollar.
“Operating cost increased by 27 percent driven by increased costs of various inputs such as fuel, electricity and spare parts. Inflation, higher borrowing interest rates and currency fluctuation have also contributed to the increased costs,” said Carbacid.
The board said it will be considering a dividend decision based on full-year results. Carbacid last year paid a dividend of Sh1.70 per share amounting to Sh433.25 million or 53 percent of the Sh816 million net profit posted in the financial year ended July 2023.
The firm’s sales have been on recovery after having previously declined significantly in the wake of increased competition from alcohol manufacturers who harvest the gas as a by-product of their production process. Carbacid responded by seeking new markets and positioning its carbon dioxide as a high-quality product.
The Carbacid board is still concerned with macroeconomic challenges such as global disruptions, inflationary pressures, currency fluctuations and increasing costs of operations.
“The US dollar shortages in some regional markets continue to impact demand and the business continues to establish means of coping. The Board continues to look at options to grow business levels in this turbulent environment,” said Carbacid.
