Zimbabwe’s NOIC declares dividend to Govt

oil

State owned National Oil Infrastructure Company of Zimbabwe (NOIC) has declared a $4 million dividend to Government for the 12 months ended December 31, 2015.Chairman Dr Jimias Madzingira said the dividend was achieved on the back of increased throughput and stringent cost containment instituted by the NOIC board, which drove the company’s profitability last year.

“The dividend came as a result of a 37 percent increase in profits. As a result of increased throughput and cost containment measures, the board has been able to declare a dividend of $4 million,” Dr Madzingira said.

NOIC is now planning fresh investment into other areas to diversify revenue by extending capacity to ethanol and liquefied petroleum gas handling and storage.

“These projects should diversify our revenue,” he said.

Increased throughput and decline in cost has seen NOIC’s revenue grow exponentially in the last two years from $11,4 million in 2014 to $16,1 million last year. Total throughput volumes in the year to December 2015 stood at 1,53 billion litres of combined product, which represented an increase of 10 percent on prior year.

Dr Madzingira said the decision to declare a conservative dividend of $4 million was taken considering that the company is implementing a number of projects, which require huge amounts of capital. Further, the dividend was taken in light of the fact 2016 is proving to be more challenging year economically. The prior year, the dividend came in at $3,5 million.
The national oil infrastructure company intends to invest an estimated $20 million in the next four to 18 months, which will significantly transform NOIC’s operations.

Dr Madzingira expressed optimism that the company would remain profitable, although this was likely to be reduced in future due to the difficult economic conditions. In 2015, the economy grew by 1,5 percent and growth is forecast at a slower rate of 1,2 percent this year.

Secretary for Energy and Power Development Partison Mbiriri commended NOIC for managing to declare a “significant” dividend at a time many companies are struggling for viability in an increasingly difficult economic environment.

“They provide an essential service to an economy that is not doing well,” Mr Mbiriri said.

The company commenced operations as NOIC in March 2011 after it was unbundled from its forerunner, the National Oil Company of Zimbabwe, NOCZIM. The other, Petrotrade, is into fuel trading activities.

NOIC owns a 50 percent stake in Petrozim Limited, a joint venture with LONMIN, formerly LONRHO. Petrozim owns and operates the Feruka (Mutare) to Harare pipeline. The pipeline is the cheapest and most efficient way of transporting fuel to Zimbabwe and beyond.

NOIC is also a 40 percent shareholder in independent Petroleum Terminal, which is also owned 40 percent by Independent Petroleum Group of Kuwait and 20 percent by PETROMOC Mozambique. The company is registered in Mozambique and operates oil storage in Beira.

Source: The Herald