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Centum Investments, one of the largest investment companies in East Africa, has warned investors that its full-year net profit for the year that ends on 31st March 2021 is expected to be at least 25% lower than the net profit recorded a year ago.
The company which invests in real estate, private equity, and marketable securities partly blames the impact of the covid19 pandemic on its private equity investments for the weak financial performance.
In a public notice, Centum said, “Our private equity business segment holds investments in various sectors some of which were significantly affected by the covid19 pandemic especially in the first half of this financial year”.
Centum investment firm also attributed the expected decline to the absence of gains on disposal for the year ending on 31st March 2021, unlike in the previous financial year when they registered KSh12.5 billion gains on disposal of investments.
The investment company posted a half-year net loss of KSh2 billion at the end of September 2020, it’s biggest loss on record.
The firm’s real estate business generated strong sales and cash collections despite the pandemic challenges. “Centum completed land sales in this financial year and booked approximately KSh2 billion in revenue at a significant value uplift,” the company said. Although the transactions significantly boosted Centum’s cashflows, the company said that they had minimal impact on profitability “because the transactions were done at approximately the carrying value which was based on the most recent market valuation”.
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