Local refiner Engen blamed external business conditions for its disappointing 1995 financial results announced this week. Net income plunged R300-million to R116- million compared to R416-million in 1994.
Chief executive officer Rob Angel blamed the fall in profits on restructuring costs of R79-million, increased financing costs of R90-million, an eight-year low in refining margins and teething problems at its Durban refinery.
He said the plant had been plagued by 17 external power cuts in the past 12 months which he felt was unacceptable and totally “third world”.
The company has recently completed a major transformation programme which will generate savings of about R55-million a year. It is repositioning itself to focus on its core business of refining and marketing.
Angel said the company intended listing its upstream (exploration and production) business separately in the first quarter of 1996.