ENGEN BOTSWANA : UNAUDITEDPRELIMINARY FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

Unaudited Preliminary Financial Statements for the year ended 31 December 2022

ABRIDGED GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2022

	2022	2021
	P'000	P'000	%
		Restated	Change
Revenue*	4,112,311	2,278,529	80.5
Cost of Sales*	(3,650,301)	(1,834,310)
Gross Profit	462,010	444,219	4.0
Other Operating Income*	15,382	13,562
Operating Expenses
Foreign exchange gains	9,432	2,518	274.6
Administrative Expenses*	(13,775)	(21,435)	(35.7)
Distribution & marketing expenses	(89,841)	(80,614)	11.4
Other Operating Expenses	(4,040)	(2,969)	36.1
Total Operating Expenses	(98,224)	(102,500)	4.2
Operating profit	379,168	355,281	6.7
Share of profit of joint ventures	5,596	1,044
Finance income	5,085	7,463
Finance costs*	(9,819)	(8,603)
Profit before tax	380,030	355,185	7.0
Taxation	(92,892)	(93,945)
Profit for the year attributable to equity holders of the parent*	287,138	261,240	9.9
Other comprehensive income	-	-
Total comprehensive income for the year*	287,138	261,240	9.9
Earnings per share (thebe)*	179.8	163.6
Profit before taxation is stated after
taking into account the following:
Depreciation*	19,030	23,138
Staff costs	17,660	17,260

Note:

The group's 2021 financial results were restated due to correction of prior period errors. The restated figures have been marked with *.

SUPPLEMENTARY REPLACEMENT COST STATEMENT for the year ended 31 December 2022

Replacement cost results

			2022	2021	%
			P'000	P'000
				Restated	Change
	Historical cost net profit*	287,138	261,240
	Less: Inventory effects net of taxation	162,061	151,164
	Inventory profits	207,770	193,800
	Taxation @ 22%	(45,709)	(42,636)
	Replacement cost net profit	125,077	110,076	13.6
	Shares in issue	159,722,220	159,722,220
	Historical cost earnings per share (thebe)*	179.8	163.6
	Replacement cost earnings per share (thebe)*	78.3	68.9
	Gross dividend per share paid and provided (thebe)	79.4	112.0
	Total gross dividend per share including proposed amount not provided	79.4	124.7
	STATEMENT OF FINANCIAL POSITION
	As at 31 December 2022
			31	31
			December	December
			2022	2021

	Current Liabilities
	Trade and other payables	390,601	393,878
	Tax payable	-	-
	Right of Use Lease Liability	2,299	4,245
	Forward exchange contract liability	-	1,084
					392,900	399,207
	Total liabilities		505,216	544,254
	Total Equity and Liabilities		1,379,350	1,245,374
	Abridged Group Statement of Changes in Equity
	For the year ended 31 December 2022
					Stated
					Capital tained Earnin	Total
					P'000	P'000	P'000
	Balance at 1 January 2021 as previously reported	8,138	571,078		581,416
	Prior year adjustment	-	21,740		21,740
	Balance, beginning of the year		8,138	592,818		603,156
	Profit for the year		261,240		261,240
	Other comprehensive income for the year				-
	Dividends on ordinary shares		(163,276)		(163,276)
	Balance at 31 December 2021		8,138	690,782		701,120
	Profit for the year		287,138		287,138
	Other comprehensive income for the year				-
	Dividends on ordinary shares		(114,124)		(114,124)
	Balance at 31 December 2022		8,138	863,796		874,134
	ABRIDGED STATEMENT OF CASH FLOWS
	For the year ended 31 December 2022
					2022	2021
					P'000	P'000
						Restated
	Net cashflow from operations*	394,366	383,827
	Movement in working capital	(182,532)	(182,531)
	Taxation paid	(106,970)	(100,509)
	Net cash from operating activities			104,864	100,787
	Net cash flows used in investing activities	(28,228)	(28,228)
	Net cash flows used in financing activities	(166,619)	(166,619)
	Net increase in cash and cash equivalents			(89,983)	(94,060)
	Net foreign exchange differences	(2,663)	(2,663)
	Cash and Cash equivalents at the begining of the year	294,163	390,886
	Cash and Cash equivalents at the end of the year			201,517	294,163

SEGMENT INFORMATION

For the year ended 31 December 2022

Operating segments
2022
	Petrochemica
	l Activities	Property Letting	Consolidated
	P'000	P'000	P'000
Revenues	4,112,311	-	4,112,311
Depreciation	19,030	-	19,030
Forex gains	9,432	-	9,432
Finance costs	(9,819)	-	(9,819)
Taxation	(92,892)	-	(92,892)
Share of profit of joint ventures	-	5,596	5,596
Profit for the year after tax	281,542	5,596	287,138
Total assets	1,337,082	42,268	1,379,350
Total liabilities	505,216	-	505,216
Capital expenditure	40,470	-	40,470

INDEPENDENT AUDITOR'S REPORT

The independent auditors, PricewaterhouseCoopers, have not yet issued their opinion on group's financial statements for the year ended 31 December 2022. The audit process is in the finalisation stage and the financial information that is presented in this press release is thus unaudited. The audited annual financial statements which will be published in due course.

BASIS OF PREPARATION AND

ACCOUNTING POLICIES

The financial statements have been prepared in compliance with; the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board ('IASB'), interpretations issued by the International Financial Reporting Interpretations Committee of the IASB and the requirements of the Companies Act of Botswana (Companies Act, CAP 42:01). Historically reported financial results have been restated to correct for errors identified in those results. The amounts and balances so restated have been identified with an asterisk (*) in this publication.

EXECUTIVE COMMENTS

This press release provides an overview of our financial performance for the year ended 31st December 2022. GDP growth continued to recover in 2022 due to it being the first full year without any Covid-19 restrictions. The global economic performance was affected mainly by high inflation and in particular high fuel prices that were caused by the Russia/Ukraine conflict which started in February 2022.The economy was affected by low consumer disposable incomes and this affected sales volumes during the year which were not able to rise above pre Covid-19 levels.Despite these challenges, the group delivered very strong results during the 2022 financial year.The retail channel continued to remain the cornerstone of the business in Botswana. This channel continued to deliver strong results generated from fuels and non-fuel revenues. These results were achieved through a greater focus on efficiency improvements and cost management. One new, full offer, retail outlet was streamed during the year with a few others which are in the network planned for streaming in 2023.The group continued to diversify its commercial sales channel to strengthen its volume performance. This channel continued to be highly price sensitive and the group had to continuously manage the effects of strong price competition to remain competitive in the market.

We believe that high levels of operational efficiency and the responsible conduct of our business in line with our values and cultural beliefs will stand us in good stead to surmount the challenges that we may encounter in the future. This will assist to deliver strong results for our

and continue to embrace our long-term strategic intent to grow the Engen brand in the Botswana market and be the leading brand of choice in this market.

We recognise the commitment of our investors to the group, and therefore one of our key objectives is to ensure that the group delivers long term, sustainable and robust performance and value to our shareholders through leverage on technology, people, know- how, strong partnerships and adaptation to the rapidly changing business operating conditions.

The group results, tabled below, testify to the success of the group's business model under challenging economic and social circumstances. The group results are underpinned by a strong focus on our key values of Integrity, Performance, Team-work, Empowerment and Ownership.

FINANCIAL PERFORMANCE

Financial performance comments:

Revenue increased by 80.5% mainly due to the numerous and significant fuel price increases emanating from the Russia/Ukraine conflict. Retail volumes decreased by 10.8% and Commercial volumes increased by 29.7%. There were six price adjustments and one industry margin increase during the year. Foreign exchange gains increased from P2.5 million at the end of 2021 to P9.4 million at the end of 2022.The group exercised good margin management and cost control throughout the year.Overall, the group's performance reflects a net profit after tax of P287.1 million.

The group performed above expectations on a replacement cost basis which represents the net profit after tax excluding the effects of inventory revaluations caused by movements in global crude oil prices. The replacement cost net profit increased from P110.0 million to P125.1 million from 2021 to 2022 representing a 13.6% increase.

OPERATING REVIEW

Crude oil prices increased steadily due to increased demand as a result of the constraints caused by the Russia/ Ukraine war. The steady increase in crude oil prices resulted in significant inventory revaluation gains throughout the year. Despite the difficult and unprecedented trading conditions, both within Botswana and interna- tionally, the group continued to perform very well by growing shareholder value during the course of 2022.

Fuel supply of most of the products into Botswana from our supply sources was reasonably stable during the course of the year and we were able to supply our customers without any stock outs.

convenience and service offering to retain existing business and attract new customers.The commercial side of the business continued to deliver strong results which exceeded expectations. Distributors of lubricants continued to play a pivotal role in the good financial performance of this channel. The group achieved a good Net Promoter Score which was testimony to Engen Botswa- na team's dedication to customer centricity. There was very strong price competition in this sector, however, the group managed to deliver robust performance.Health, Safety, Environmental and Quality (HSEQ) Key Performance Indicators for the year under review were met and - in many cases - exceeded. This continues to be a key focus area in our business and there is zero tolerance to actions or behaviour that will compromise our stringent HSEQ standards. No major health and safety incidents were recorded in 2022. Efficiency continued to be enhanced in the Distribution part of the business in order to ensure 'On Time and In Full' deliveries, a healthy level of 'Inventory Days of Supply' and the effective management the 'Cost to Serve'.

CONCLUSION

The Directors of the group would like to thank our valued customers, suppliers, shareholders and all other stakeholders for their on-going support which contributed towards the successful year of Engen Botswana Lim- ited. The directors would also like to extend their appreciation to the management and staff for the tremendous effort applied during the year under review that ensured that we maintained our position as one of the leading petroleum companies in Botswana.

By order of the Board

Dr S Ndzinge (Chairman)

B F Sameke (Acting Managing Director)

30 March 2023
Registered Office	Transfer Secretaries
Plot 54026	CSD Botswana
Western Bypass	Fairscape Precinct

ASSETS

Non current assets

Property, plant and equipment* Right of Use Assets

Share of investments in joint ventures Investments

Deferred tax asset

Current assets

Inventories

Trade and other receivables Tax receivable

Forward exchange contract asset Cash and cash equivalents

Total Assets

EQUITY AND LIABILITIES

Equity

Stated capital

Non distributable reserve

Retained earnings*

Non-Current Liabilities

Deferred tax liabilities

Right of Use Lease Liability

Provisions*

P'000 P'000 Restated

343,209 347,507

74,974 78,232

42,268 40,992

3737

3,575-

464,063 466,768

65,335 38,075

493,205 442,616

9,899 3,528

1,262224

345,586 294,163

915,287 778,606

1,379,350 1,245,374

8,138 8,138

2,200 2,200

863,796 690,782

874,134 701,120

• 4,134
  80,550 79,472
  31,766 61,441

112,316 145,047

2021
	Petrochemica
	l Activities	Property Letting	Consolidated
	P'000	P'000	P'000
Revenues*	2,278,529	-	2,278,529
Depreciation*	23,138	-	23,138
Forex gains	2,518	-	2,518
Finance costs*	(8,603)	-	(8,603)
Taxation	(93,945)	-	(93,945)
Share of profit of joint ventures	-	1,044	1,044
Profit for the period after tax*	354,141	1,044	355,185
Total assets*	1,203,426	41,948	1,245,374
Total liabilities*	544,254	-	544,254
Capital expenditure	30,228	-	30,228

shareholders and continue to make a meaningful contribution to the economic prosperity of Botswana.

We remain optimistic about the business environment

The retail network operated lower than expected mainly due the high cost of fuel which curtailed travel of many consumers.The group competed effectively in the market and utilised its strong brand profile and consistent

Gaborone West	Plot 70667
P O Box 867	P Bag 00417
Gaborone	Gaborone