Centum Reports a 6 Months Loss of Kshs 2.048 Billion

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Centum Investments Group has reported a 6 Month Loss of Kshs 2.048 billion for the period ending 30th September 2020.

According to the unaudited financial results, this was a considerable drop in profit after tax compared to Kshs 10 billion reported within the same period under review.

The significant drop in earnings was attributed to low revenues due to the Covid-19 pandemic. Centum reported revenues of Kshs 0.294 billion compared to Kshs 4.775 billion in Q2 of 2020.

According to its statement, Centum reports that the 6-month period was challenging due to Covi-19, economic uncertainty, and disruption of its business activities.

Earlier, Centum launched the 4.0 strategy that was focused on building its balance sheet through reduced debt, enhanced liquidity, switching to cash-generating activities, and value preservation.

During the 6 months, Centum managed to reduce its net debt of Kshs 4.1 billion by retiring its 5-year bond fully. The company also made repayments of its USD denominated loan amounting to USD 75 million. On a positive note, this managed to reduce its finance costs significantly from Kshs 1.2 billion to Kshs 335 million.

To enhance its liquidity, Centum which is mainly focused on  real estate managed to repay shareholders loans amounting to Kshs 3.75 billion. The shareholder loan was not recognized as an expense in the income statement.

To increase its cash and cash equivalents, Centum increased its investments in marketable securities to Kshs 8.3 billion much of which invested in fixed income assets.

The switch to cash flow generating activities has boosted the companies interest income cushioning against the decline in dividend income while preserving cash for working capital.

Centum’s earnings per share dropped to a negative figure of (-2.09) compared to 10.70 in the same period under review.

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About Author

Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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