Total Kenya sees 2011 profit down sharply

Fuel marketer Total Kenya said on Monday is sees its 2011 full-year profit being sharply lower than a year ago, citing higher interest rates, a weakening Kenyan shilling against the dollar and the limitations of price caps that were instituted in December last year.

"Whereas volumes for 2011 are expected to remain largely at last year's level, the continued presence of various challenges in the oil industry will negatively impact the company's profitability," the company, part of French oil major Total, said in a statement to the bourse.

Kenyan firms are facing a tough business environment this year after interest rates ratcheted upwards and the shilling depreciated to unprecedented lows against the dollar.

For oil marketers, the challenges from the macroeconomic environment have been compounded by a move by the regulator in December last year to cap the retail price of oil.

Total said the price regulation process "omits and underestimates some costs in determination of the maximum retail prices."