A combination of forex losses, underperformance of the Kenyan market, demurrage and storage costs sunk Car and General into a loss of Sh274 million in the 15 months to December 2023.
The loss comes after the group had made a profit after tax of Sh679 million during previous financial year.
The firm said that in the fifteen months between October 1, 2022 and December 31, 2023, it encountered an "extremely" challenging operating environment.
The dollar shortages in Kenya and Tanzania coupled with a 27 per cent devaluation in Kenya and Tanzania’s over eight per cent, led to forex losses of Sh645 million.
This was exacerbated by demurrage and storage charges of Sh180 million in Tanzania.
The company’s secretary Conrad Nyukuri said in a statement that the combined loss of these two exceptional items was Sh825 million, which had a significant impact on Group profitability.
“The forex appreciation of the Kenya shilling in 2024 has reversed some of these forex losses,” said Nyukuri.
The group delivered a 12 per cent year-on-year growth in turnover, the highest growth area being Tanzania at 36 per cent.
Sales in Uganda and Tanzania now represent over 58 per cent of group sales.
However, its Kenyan business performed badly with the two-wheeler (boda boda) business emerging as the worst hit. This saw the overall market volumes in 2023 dropping by almost 77 per cent.
“This was the result of unit price increases due to the devaluation, the increase in the price of fuel and the general inflationary environment which resulted in a lack of profitability for boda boda riders,” the company said.
The group's financials show that turnover for the fifteen-month period ended December 31, 2023 was Sh27.2 billion, against Sh19.4 billion achieved in the twelve months ending September 30, 2022.
Earnings before interest, tax, depreciation and amortization (EBITDA) grew to Sh2.18 billion from Sh1.98 billion.
Other comprehensive income, net of tax, was positive to the tune of Sh465 million resulting in a positive total comprehensive income of Sh191 million.
Car and General maintains that going forward, uncertainty will persist in 2024 given the challenging global geopolitics.
“We do however expect less turbulence in East Africa. Key to success will be maintaining strict fundamentals in terms of higher efficiency levels in all areas of our business, maintaining market share in core products and achieving satisfactory profitability across all businesses,” it said.
