Centum narrows half year loss to Sh426m

Centum CEO James Mworia

Centum Investment Group CEO James Mworia. Centum Investments. 

Photo credit: File | Nation Media Group

Centum Investment Company narrowed its net loss by two-thirds to Sh426.4 million in the half year ended September, helped by a recovery in its real estate business.

The company had made a larger net loss of Sh1.29 billion in a similar period a year earlier.

The property business comprising the Centum Real Estate subsidiary posted a profit of Sh518.8 million, reversing a loss of Sh267.9 million.

The Two Rivers Development project also narrowed its loss from Sh984.7 million to Sh777.3 million while the investment operations moved to a profit of Sh8.3 million from a loss of Sh344.7 million.

Centum’s financial services operation, comprising Sidian Bank, saw its profit fall to Sh201.7 million from Sh385.2 million.

Its trading business including Longhorn Publishers posted a loss of Sh113.7 million, reversing a profit of Sh42.6 million.

The Nairobi Securities Exchange-listed firm, which invests in diverse sectors, organizes its operations into five segments.

The loss reported in the review period captures the performance of all its subsidiaries and joint ventures.

At the holding company level, representing only administrative costs and the performance of its portfolio of securities such as bonds, Centum reported a 487 percent surge in net profit to Sh1.4 billion.

This was up from Sh244 million the year before.

“The improvement was attributed to improved performance in portfolio companies,” Centum said in a statement.

The firm says its operating and administrative expenses grew 18 percent to Sh300.3 million, reflecting the impact of rising inflation and implementation of the Finance Act in the period.

Centum cut its borrowings at the holding company level, a move that saw finance costs fall to Sh142.1 million from Sh214 million. It closed the period with borrowings of Sh2.1 billion.

The company earlier said it plans to become a debt-free holding company by March next year.

The firm has gradually reduced its borrowings in recent years in a strategy it says is aimed at eliminating risks linked to indebtedness in an environment of rising interest rates and weakening shilling.

The company says its subsidiaries, joint ventures and associates will continue to carry debt based on their capacity. The strategy seeks to control the risk of borrowings at each operating unit.

Across the group, borrowings declined to Sh17.7 billion from Sh19.6 billion.

The debt has dropped further following last week repayment of a Sh2.95 billion bond by Centum Re, the property subsidiary.

Centum says it has bought back a cumulative six million units of its own shares as part of its efforts to close the gap between its share price (which closed at Sh8.4 yesterday) and its net asset value per share of Sh62.82 as of September.

Share buybacks have the effect of reducing the volume of outstanding stock, potentially boosting the share price.