Centum profits dip 21% on depressed markets

CBK chairman Mohammed Nyaoga with CENTUM investment managing director James Mworia at the launch of the re-branded K-rep bank to Sidian in Nairobi on April 4,2016./FILE
CBK chairman Mohammed Nyaoga with CENTUM investment managing director James Mworia at the launch of the re-branded K-rep bank to Sidian in Nairobi on April 4,2016./FILE

Centum Investment group has announced a 21 per cent drop in it's profit after tax as at September 30, 2017.

The drop is from Sh2.057 billion recorded during the same period under review to Sh1.63 billion announced yesterday.

Announcing the results, the group chief executive officer James Mworia attributed the drop to the negative impact of interest rate capping regulations on its banking subsidiary, Sidian Bank, lower income from its asset management subsidiaries driven by depressed markets, and a sluggish transaction environment as a result of the political uncertainty that characterised much of the year.

The group's total asset value recorded a marginal surge of 3.9 per cent to Sh91.91 million up from Sh88.38 billion, while its net asset value per share was Sh69.7 at the end of the period under review.

According to Mworia, this represents a compounded annual growth rate of 17 per cent over the last four years, underscoring the group’s commitment to sustained value creation for its shareholders.

also incurred higher finance costs during the period and increased consultancy costs as part of its business development activities.

While the group recorded a drop, the company- Centum Investment Company Plc recorded a 26 per cent decrease in investment income from Sh1.5 billion announced last year to Sh1.1 billion recorded as at September 30, 2017.

The drop was driven by reduced dividends from subsidiary companies.

The prevailing political uncertainty also impacted on the company’s diversification strategy with no exit transactions closed by September 2017.

Despite the decline in overall profitability, the group’s trading subsidiaries reported a 9 per cent increase in trading profits, primarily driven by increased profitability of Almasi Beverages on the back of both volume growth and increased operational efficiency.

As a strategic plan to grow its revenues, the group now eyes significant development activity anticipated in both the real estate and development portfolios, together with an increased focus in monetisation of real estate assets.