Centum Investment Company has declared a loss of Ksh1.37 billion ($12.6 million) at the end of its 2021 accounting year, making it the first time the group would post a loss in 42 years.
The shareholders are on course to earn a dividend of Ksh218 million ($2.0 million), which translates to Ksh0.33 ($0.00304) per share.
Centum is Kenya’s largest listed investment firm. The bulk of its investments are in real estate and private-equity assets in the consumer goods, financial, agribusiness and power sectors.
The company, which operates as an affiliate of the Kenyan state-owned Industrial and Commercial Development Corporation (ICDC), saw its pre-tax profits plunge by 334 percent from Ksh5.45 billion ($50.2 million) a year ago to Ksh2.3 billion ($21.2 million) at the end of the 2021 accounting year.
The company’s profitability during the year was impacted by a fall in its investment income and sales revenue caused by COVID-19 induced disruptions.
A loss of Ksh1.9 billion, which Two Rivers Development Limited booked during the year on account of high finance costs caused by its leveraged capital structure, also pressured its earnings down to a loss of Ksh1.37 billion ($12.6 million).
Two Rivers Development is a company subsidiary focused on the real estate sector. It is a vision-2030 accredited development sitting on 102 acres of master-planned and serviced land.
Reacting to the high finance costs that impacted the group’s earnings power, Group CEO James Mworia said the boards of Two Rivers Lifestyle Centre and Two Rivers Development have initiated steps to restructure the balance sheets to reduce interest-paying debt, and significant progress has been made so far.
The company has also made a move to raise capital for its flagship property developers whose high financing costs pushed it into a full-year loss, with plans to conclude capital-raising this year.
As of press time, 8:15 aM (UTC), July 29, shares in Centum on the Nairobi Stock Exchange were worth Ksh15.80 ($0.14) per share. This is 10.2-percent lower than its opening price on Monday, as investors take a flight to safety by selling off shares in the leading investment company.