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Kenya

UAP counts losses as Uchumi issues profit warning for 2015

UCHUMI-SUPERMARKETNAIROBI, Kenya, Sep 1 – UAP Holdings has posted a Sh449 million net loss in its 2015 half year results compared to Sh53.8 million net profit recorded over the same period in 2014.

The loss was mainly attributed to the weakening of regional currencies against the United States dollar and reduced investment income brought about by the unrealised losses in the value of equities listed on the Nairobi Securities Exchange (NSE).

The group’s investment income reduced by 28 percent to Sh716 million down from Sh992 million recorded in 2014.

The group however recorded a 9 percent increase in gross written premiums to Sh8.1 billion from Sh7.9 billion recorded same period in 2014.

“Our expenses increased by 14 percent due to significant investment in creation of capacity for growth in the group’s new subsidiaries in Kenya Uganda, Rwanda, Tanzania and DRC. In addition the groups finance costs also increased over 300 percent due to interest cost of UAP corporate bond and the group’s property development,” the management said.

The Group and Old Mutual combined their businesses to form UAP-Old Mutual management following the takeover of its business by Old Mutual.

The combined business of UAP Holdings and Old Mutual Kenya will be listed at the Nairobi Securities Exchange (NSE) once the ongoing integration of the two businesses is complete.

Old Mutual initially acquired 23.33 percent stake in UAP held by Centum Investment Company and Industrialist Chris Kirubi.

READ: Why I sold my stake in UAP Holdings

The firm also bought 37.3 percent shareholding from private equity firms including Abraaj Group, AfricInvest and Swedfund.

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Former UAP Group Managing Director Dominic Kiarie quit after the UAP and Old Mutual Group merger.

Meanwhile Uchumi Supermarkets has warned that its 2015 full year profits will decline by about 25 percent attributing to what the management termed as ‘challenges of working capital’.

The retail chain halted its expansion plans after noting that the expansion was conducted without internal capacity or funding.

In the last two weeks the board has managed to poach Naivas Supermarkets Retail Business Executive Willy King’ara to be the new Chief Operating Officer and Equity Banks Chief Operating Officer Julius Kipngetich to be the new CEO.

READ: Kipngetich leaves equity to head struggling Uchumi

“A comprehensive revamp of Governance as well as processes and procedures has started and we have already seen a change in our stores with increased customer footfall and revenue,” the Uchumi management said.

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