Sameer Africa has shifted its focus to its real estate days after closure of its tyre distribution unit.
The company now believes it will make gains in the real estate after shutting the tyre business that saw it make losses for years despite efforts to cut costs.
“The impact of this change is that the company will henceforth trade mainly in the rental business arena,” read a statement from Sameer.
Sameer said closing of the tyre business would cost the company loss worth Sh1.49 billion. However, the profit from it will rise due to the reduction of losses from the tyre division.
“The full-year profit projection in 2021 is forecast at Sh185 million, against a forecast of Sh69 million this financial year 2020,” said Sameer.
According to Sameer, Sh223 million will be used to shut the tyre business. This includes Sh 60 million cutback costs and Sh163 million in dealing with fixed assets.
Although the tyre business has come to an end, investors believe land still holds value. The company has land holdings it acquired decades ago at a lower price and has been reporting the value of those lands at its balance sheet.