NAIROBI, Kenya, Nov 11 – Centum Group has posted a 55 percent rise in its half year 2016 profit to Sh1.9 billion from Sh1.2 billion recorded in the 2015 half year.
The underlying performance was driven by a high improvement in some subsidiaries, including those in real estate as well as dividend income from subsidiaries.
“The various elements of investments increased significantly. Dividend income went up by 11 percent; interest income went up on the fact that we were holding more cash and receiving more interest. The general underlying portfolio companies also improved,” Centum CEO James Mworia said during an investor briefing on Wednesday.
However, comprehensive income fell 75.9 percent to Sh792million as a result of release of a reserve for UAP, sold in the second half of the previous year, and Aon Minet Insurance Brokers.
Mworia notes that the group would have performed better was it not for about Sh270 million forex loss, when the company was repaying a bridging RMB loan of Sh3.3 billion.
The share of associate income fell 41.3 percent to Sh192 million partly as a result of an exit from Aon Minet and conversion of some associate businesses into subsidiaries, specifically Almasi Beverages acquired in December 2014.
However, during the period, Centum recapitalized K-Rep Bank by taking 67.5percent stake at a cost of Sh1.2 billion to increase core capital of the bank.
With a new board and key management, Centum plans to increase the profile of the bank from a tier 4 to a tier 2 bank. K-Rep is also expected to benefit from other portfolio businesses held by Centum.
Finance costs climbed 381.3 percent to Sh1.26bn as a result of higher borrowing especially the Sh6.1bn bond and the foreign exchange loss.
“We would have even performed much better but remember we were paying at Sh97 yet we had got the loan when the dollar was trading at around Sh82,” Mworia explained.
Going forward, Centum is confident about its ongoing projects including 1,190MW coal power plants of Amu Power and Akiira geothermal, Two Rivers Mall set to be complete in December 2015 with opening date now at March 2016.
Other projects mixed use city on 11,794 acres of agricultural land in Vipingo and Pearl Marina in Uganda which is expected to see new partners brought in to raise finance for continued execution.
For new projects, Centum is scouting for a viable site to launch the flagship school in association with SABIS schools and Investbridge as part of a plan to create 20 education centres across Africa.