Profits slow down at auto dealer CMC

May 23, 2011
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, NAIROBI, Kenya, May 23 – Auto dealer CMC Holdings has reported a 0.7 percent decline in profit as net income stood at Sh187.6 million for the first six months of the current financial year.

The drop in profitability from Sh188.9 million a year earlier is attributed to a decline in revenues as turnover fell 11 percent to Sh6.1 billion after the company minimised sales on credit in both the Kenyan and Tanzanian markets.

The expenses for the period are 18.7 percent more than the previous period mainly due to a more aggressive doubtful debts provisions policy adopted in the current period.

Net finance costs reduced by 38 percent due to better management of its banking facilities. Low orders from the Kenyan government also saw the number of cars sold drop to 1,202 from 1,272 a year earlier.

"Uganda on the other hand has had a slow year due to the general elections in February and disruption of business thereafter," CMC said in a statement.

With brands such as Land Rover, Volkswagen and Ford under its wing, the firm however expects increased sales in the second half of the financial year.

In line with proposals from the board of directors, the auto dealer did not recommend any interim dividend to be paid.

CMC recently saw significant changes to the Board, with the resignation of long serving Chairman Jeremiah Kiereini as well as the exit of Managing Director Martin Foster.

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