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Financial services weighs down Centum Group HY profit to Sh1.6Bn  

Centum CEO James Mworia is however optimistic that the turbulence in the financial sector is temporary and that the operational and strategic changes made at Sidian Bank will bear fruit in the mid-term.

NAIROBI, Kenya, Nov 27 – Centum Investment Group has posted a profit of Sh1.6 billion for half year 2017compared to Sh2.1 billion same period in 2016, a 21 percent drop.

Centum Chief Executive Officer and Managing Director Dr. James Mworia attribute the drop in profit to a depressed performance of its financial subsidiary, Sidian Bank, due to interest rate capping and an unfavorable economic environment.

As a result, interest income was down 37 percent with the Group opting to retain cash and earnings from subsidiaries in light of the challenging political and economic environment.

“We had a mixed bag. Our trading subsidiaries did better than last year but the performance of our financial services reflected the sector over the period,” says Mworia.

Mworia is however optimistic that the turbulence in the financial sector is temporary and that the operational and strategic changes made at Sidian Bank will bear fruit in the mid-term.

The trading subsidiaries, specifically beverage and publishing contributed over half of the group’s turn over which grew by 1 percent from Sh8.5 billion in 2016 to Sh8.8 billion in 2016.

Almasi Beverages sales were up by 8 percent on the back of strong volume growth while Longhorn grew by 41 percent on revenues from Malawi and Zambia.

Mworia says the Group is finalizing a couple of key transactions that should be concluded by March 2018 significantly contributing to the company’s full-year bottom-line.

“We also have a number of (real estate) projects that we expect to launch and which have been received well,” adds Mworia.

Among the projects the investment company is looking to finalize in the first quarter of 2018 is the Vipingo Ridge mixed-use development in Kilifi with significant progress made at Pearl Marina in Uganda.

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“Our strategy is to develop new urban nodes like what we have done with Two Rivers by acquiring significant parcels of land in strategic areas, developing a master plan then change use from agricultural use to commercial use,” says Mworia.

He adds that strategy also includes attracting third-party capital at development level while at the same time develop infrastructure.

“Monetization of the significant value uplift is realized through the sale of construction-ready sites to third-party investors.”

Looking forward, Mworia says the company is at the tail-end of exiting some investments, though he remains cagey on the divestiture plans, only saying that Centum will off-load chunks of land in Uganda.

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