The National Oil Infrastructure Company of Zimbabwe (NOIC) against all odds declared a dividend of US$4 million to the state for the 12 months ended 31 December 2015. The company commenced operations in March 2011 after it was unbundled from its predecessor, the National Oil Company of Zimbabwe (NOCZIM). NOIC controls Petrotrade which is into fuel trading activities and runs retail service stations. NOIC is a 50% shareholder in Petrozim Limited a joint venture agreement with LONMIN. Petrozim owns and operates the Feruka (Mutare) to Harare pipeline, which is the cheapest and most effective way of bringing fuel into Zimbabwe. NOIC also owns a 40% stake in Independent Petroleum Terminal, which is also owned 40% by Independent Petroleum Group of Kuwait, with the remainder owned by PETROMOC of Mozambique, a company domiciled in Mozambique and operates an oil storage in Beira.
The board indicated that the dividend was achieved on the back of increased throughput and stringent cost containment strategies that resulted in a 37% increase in profits. NOIC’s revenue grew exponentially in the last two years from US$11.4 million in 2014 to US$16.1 million last year. There was also a 10% increase in throughput volumes in the year to December 2015 with 1,53 billion of litres of combined product going through their stable. NOIC is probably the only parastatal that has declared a dividend to government for the past two years, as it also declared a US$3.5 million dividend in the prior year. NOIC should be used as a yardstick which other parastatals should strive to follow suit.
It is encouraging that the board is contemplating expanding its ethanol and Liquefied Petroleum Gas (LPG) handling and storage capacity, particularly considering the fact that most households have resorted to LPG due to the erratic supplies of electricity by the power utility Zimbabwe Electricity Supply Authority (ZESA) Holdings.