•The Two Rivers Development performance was a threefold increase from the Sh2.29 billion loss that the firm posted a year earlier.
•In February this year Centum commenced a buyback of 66.5 million shares in an effort to stabilise the price and market valuation of the company.
Centum net losses widen to Sh4.9 billion for the year ended March 2023, majorly weighed down by the performance of its Two Rivers development project.
The NSE-listed company financials show that losses from Two Rivers Development Group stood at Sh7.1 billion.
The Two Rivers Development performance was a threefold increase from the Sh2.29 billion loss that the firm posted a year earlier.
Centum had already issued a profit warning indicating that its full-year profits for 2023 will dip by 25 per cent compared to the previous year.
"The performance was largely impacted by the loss from Two Rivers Development's operations on account of a Sh3.9billion shilling impairment provision in addition to a high level of finance costs," Centum said in a statement.
The investment firm also saw impairment provisions related to the disposal of some of its property take a hit on the company’s balance sheet.
Two Rivers Development, the subsidiary of Centum Investment, had undertaken the strategic decision to sell some of its assets to reorganise its balance sheet and enhance operational efficiency.
The asset sale was carried out with the intention to streamline the company’s operations and focus on core business areas.
However, despite the efforts to optimise its portfolio, TRDL faced challenges during the process.
As a result of the asset sale, TRDL was left with a balance of undeveloped land, which Centum Investment subsequently recognized as impairment losses.
The performance has seen Kenya's largest listed investment firm maintain a flat dividend at Sh0.60 per share.
In the review period total liabilities increased from 71.9 billion to 75.9 billion while assets held for sale within the period recorded a drop to Sh42.947 billion.
The groups total assets stood at 113 billion from Sh118.5 billion reported in march 2022.
“Centum’s consolidated financial performance in full year 2023 is will be impacted by the impairment provisions relating to the business operations of TRDL,” the company said in an earlier statement.
When the value of an asset experiences a significant decline, it results in impairment losses, causing a decrease in its recorded value on the company's balance sheet.
Centum Investment's financial performance was notably affected by impairment losses related to TRDL's undeveloped land, leading the company to issue a profit warning.
Following an earlier profit warning, Centum noted that it is proactively engaging with shareholders, analysts, and stakeholders to offer insights and explanations about the circumstances.
Simultaneously, the company initiated a share buyback program to reward its investors as the share price had been stagnant and declining over the course of several years.
In February this year Centum commenced a buyback of 66.5 million shares in an effort to stabilise the price and market valuation of the company.
This was following a nod from shareholders that approved a Sh600.8 million allocation to finance the repurchase.
The buyback will be conducted over a period of 18 months from the date of the resolution, closing on August 8, 2024.
However, the Centum board of directors reserved the right to terminate the buyback on certain conditions.
These include when the programme is no longer deemed to be in the interest of the company and shareholders, in the event of changes to economic and market conditions and in the event of a material change in the company’s financial position.