- The shilling dropped 14% against the dollar during the review period
- Finance costs on borrowings were up 96%
Old Mutual Holdings Plc grew revenue by 12 per cent to Sh1.8 billion in the first six months of the year, cutting losses to Sh348 million.
The diversified financial firm's gross earnings for the year grew to Sh0.2 billion compared to a Sh0.9 billion loss in the corresponding half last year.
This is attributed to profitable growth in revenues, which increased by Sh1.8 billion, coupled with increased investment income from financial assets and investment properties but partially countered by the significant increase in finance costs.
Finance costs on borrowings were up 96 per cent over the same period in 2022 due to increased interest rates and forex losses on the portion of the US dollar-denominated debt.
The Libor, on which basis interest is determined for US dollar loans, has moved from 0.59 per cent in June 2022 to five per cent in June 2023, while the Kenya Shilling depreciated by 14 per cent against the US Dollar over the same period.
Operating profits before finance costs are Sh2.1 billion in 2023 compared to Sh0.1 billion in 2022.
Old Mutual Group EA chief executive officer Arthur Oginga told investors that he is optimistic about the company's resurgence, citing the anticipated enhancement of the East African operational landscape due to a decreasing inflation rate and a positive GDP growth projection for the year.
“Our strategy is focused on delivering our integrated financial services offering to meet all our customer's financial needs under one roof. This will enhance our customer experience and improve productivity on our distribution channels in our various markets,” Oginga said.
For the remainder of the year, the group is positive about the region's economic outlook but carefully notes potential risks from rising Global Oil prices and adverse effects of the El Nino weather phenomenon.
The board did not recommend a dividend payout for the period.