Centum issues profit warning on lower asset valuations
Investment firm Centum #ticker:ICDC has issued a profit warning for the full financial year ended March 31, 2018 citing lower asset valuations, political uncertainty, reduced access to credit and un-concluded transactions.
The Nairobi Securities Exchange (NSE) listed firm now expects to post net earnings at least 25 per cent lower than what it reported last year, which ended March 31, 2017.
In 2017 Centum recorded a net profit drop of 16 per cent to Sh8.3 billion from Sh9.9 billion in 2016.
Centum group chief executive James Mworia said the company’s investment properties recorded a gain in value during the period, but it was lower than that recorded in the year before.
“This is consistent with the performance of the Kenyan real estate market where real estate generally and commercial property in particular appreciated in value at a lower rate in 2017 on account of the political environment and the reduced access to credit by the private sector,” said the CEO in a notice to investors.
Mr Mworia however said there is increased market activity this year.
The decrease in revaluation gains has no impact on cash flow generated from operations, he added.
Performance is also expected to be depressed by the firm’s failure to realise gains on disposal of investments which had not been concluded by end of March 2018. The profit drop is also not expected to affect the anticipated dividend declaration for the financial year.
ALSO READ: Mworia, Mbaru to leave the NSE board of directors