NAIROBI, Kenya, Nov 28 – East Africa’s biggest investment firm Centum booked 226 percent jump in net profit to Sh6.79 billion for half year 2019/20, driven by the disposal of Almasi and Nairobi bottlers.
The company offloaded the two firms earlier this year and collected Sh18.6 billion net of taxes.
Profitability was also driven by Sh2.3 billion impairment provision driven primarily by a Sh2.1 billion provision on the debt investment in Amu Power project which is currently subject to litigation.
During the period, investment income grew by 205.6 to Sh12.4 Billion partially attributed to Sh2.6Bn gains realized from the exit of two key assets, Almasi Beverages and Nairobi Bottlers.
The two projects had an initial cost of Sh3.4Bn.
Total debt repayment hit Sh11.3 billion during the period, resulting in interest savings of Sh990 million.
Dividend income rose by 44.9 percent year on year Sh0.4 billion attributed to a return to profitability by Sidian Bank following robust non-funded income through growth in the trade finance business.
The bank also recently closed a KES 2.0Bn facility with the Dutch Entrepreneurial Development Bank (FMO).
James Mworia, Group CEO of the Investment firm said going forward, the strategic focus of the portfolio will be to enhance its ability to generate significant and consistent cash flow for the Group.
The portfolio has generated Sh3.5 billion in liquidity for the Group since 2014.
To this end, the weight of Fixed Income is set to increase with Equities diminishing.
The fixed income portfolio will be allocated to issuers with high credit quality while the remaining equities portfolio will retain its original diversified, pan-African strategy.
However, the company will have less focus on its development portfolio like the power sector investments but more towards private equity, real estate and marketable securities.
In marketable securities, the business is keen on fixed income securities and select listed equities.