Centum Investment has issued a profit warning, indicating that its full-year profits for 2023 will decrease by 25 per cent compared to the previous year.
This decline is primarily due to impairment provisions related to the operations of its subsidiary, Two Rivers Development Limited (TRDL).
TRDL, a subsidiary of the company, made the strategic decision to sell some of its assets in order to reorganize its balance sheet and improve operational efficiency.
The asset sale was intended to streamline TRDL’s operations and focus on core business areas. However, the process faced challenges, and as a result, TRDL was left with undeveloped land.
Centum recognized these undeveloped lands as impairment losses, which significantly impacted their financial performance. Impairment losses occur when the value of an asset declines significantly, leading to a reduction in its recorded value on the company’s balance sheet.
In response to the profit warning, it communicated with shareholders, analysts, and stakeholders to provide further information and context regarding the situation.
It is worth noting that this profit warning comes at a time when the company has initiated a share buyback program to reward its investors, following a period of stagnant share prices.
