TotalEnergies Kenya’s 2024 Profit Halves to KSh 1.4 Billion Amid High Interest Rates

TotalEnergies Marketing Kenya has posted a steep 50% decline in its net profit for the financial year ending December 31, 2024, with earnings falling to KSh 1.4 billion from KSh 3.02 billion in 2023. The drop reflects the mounting pressure of high interest rates and a challenging economic climate across Kenya.

Surging Finance Costs Hit Bottom Line

The primary driver behind the profit plunge was a sharp rise in finance costs, which soared by over 65.2% year-on-year. This spike followed the Central Bank of Kenya’s decision to raise the base lending rate to 13% in 2024, part of efforts to curb inflation and support the struggling shilling.

“The rise in finance expenses was mainly due to high market interest rates in 2024, impacting both working capital and short-term borrowing,” the company explained in its earnings release.

Strong First Half, Weak Finish

The year began on a positive note, with TotalEnergies reporting KSh 938.5 million in net profit for the first half of 2024—an improvement from KSh 822.5 million in the same period in 2023. However, this momentum didn’t carry through to the second half, where profits were eroded by rising operational costs and increased currency volatility.

Dividend Maintained Despite Profit Drop

Despite the earnings slump, TotalEnergies’ board has declared a first and final dividend of KSh 1.92 per share. This signals the company’s commitment to shareholder returns even amid market headwinds.

• Dividend Payment Date: July 31, 2025

• Book Closure Date: June 27, 2025

Broader Economic Headwinds

The company’s performance mirrors broader issues in Kenya’s energy sector, including:

• The removal of government fuel subsidies

• Volatility in global fuel prices

• Depreciation of the Kenyan shilling

• Reduced consumer spending and higher import costs

These factors have squeezed margins for energy firms across the board.

Forward Strategy: Resilience and Innovation

Looking ahead, TotalEnergies Kenya is taking proactive steps to navigate economic uncertainty and position itself for growth:

• Cost Containment: Streamlining operations to reduce expenses

• Forex Diversification: Expanding import sources to reduce currency risk

• Sustainability: Scaling up solar power solutions at service stations

• Digital Growth: Enhancing customer platforms for improved service and engagement

“Our focus is on creating long-term value for stakeholders while adapting to a dynamic economic landscape,” the company stated.

2025 Outlook

With inflation expected to stabilize and interest rates potentially easing, analysts forecast a gradual rebound in energy demand. TotalEnergies Kenya, with its robust retail footprint, diverse product mix, and green energy initiatives, is strategically placed to benefit from the anticipated recovery.

Photo: Total energies