NAIROBI, Kenya, Aug 10 – Standard Group Limited has posted a 45 percent drop in pre-tax profit to Sh150.7 million in its 2012 half-year results, from Sh274.5 million in 2011.
High inflation and more than doubling interest rates were the two major contributing factors to the decline, according the group.
The company added that the residual impact of the high cost of raw materials and depreciated shilling towards the end of last year increased the cost of production in the first quarter of this year.
The interest rate regime during the half year saw borrowing costs double from Sh48.6 million to Sh85.6 million, with respect to investment financing on productive assets, which the group said remains an area of adverse challenge.
Revenues grew by 8.8 percent to Sh1.72 billion from Sh1.58 billion.
Print circulation grew by 13 percent, while television and print advertising grew by six percent respectively.
Earnings per share dipped 45 percent to Sh2.03 from Sh3.71 posted in the same period last year.
No dividends were declared, but the board was cautiously optimistic that performance for second half will improve, projecting annual profits to surpass last year’s position.