NAIROBI, Kenya, Jun 19 – Listed investment company Centum has posted a 48 percent drop in its profit for the full year ending March 31, 2012.
A jump in the cost of credit to more than 20 percent, currency swings and a 13 percent fall of performance on the Nairobi Securities Exchange (NSE) last year negatively impacted the company’s returns.
Centum’s net profit dropped from Sh1.24 billion in 2011 to Sh446 million this year, while earnings per share dipped from Sh3.44 to Sh1.79 in the same period.
The Firm’s Chief Executive Officer (CEO) James Mworia said the company is looking to de-linking its investments from firms that are listed on the NSE to reduce its exposure to the fluctuations experienced last year.
“In 2009, we had almost 40 percent of our portfolio invested in the market, which meant our return was strongly related to what was happening on our stock market,” he said.
Mworia said diversifying into the region and real estate are some steps Centum is taking to boost its returns.
The company has an ambitious goal to grow its assets to Sh30 billion by 2014 from the current Sh15.7 billion, which grew marginally from last year’s Sh15 billion.
Net Asset Value (NAV) per share went up 9.1 percent to Sh20.57; however investment income posted a 43.7 percent decline for the year.
Though Centum’s profitability results took a hit, Mworia said the company’s understated net asset value holds significant potential to boost business.
“Our Private Equity portfolio is almost 60 percent of total business. When you look at UAP the value investors came in at was at least 20 percent higher than what we were carrying UAP in our books,” he said.
Longhorn Publishing, which recently opened on the local bourse, registered 60 percent higher value than in Centum’s books.
“What we are trying is grow the net asset value per share and that is how we have been creating wealth,” Mworia explained.
Mworia was also buoyant about potential gains in the Two Rivers project, the 100 acre piece of land located in the diplomatic hub near the United Nations headquarters in Nairobi, and 300 acre waterfront property in Uganda.
Other ventures include, the Nairobi bottlers business, which constitutes 65 percent of Centum’s beverage business and just invested Sh1.3 billion in acquiring and commissioning a new line to increase water bottling capacity by 12 million crates per year.