NAIROBI, Kenya, Feb 21 – Listed financial services firm Sanlam Kenya incurred a cost of Sh53 million to compensate the staff aged 50 years and above that it fired through the Voluntary Early Retirement (VER) Program.
Sanlam Kenya Chief financial Officer Kevin Mworia said the 23 workers were approved for the VER and redundancy package with the aim of cutting the company’s wage bill.
“The cost of the lay-offs was Sh53million after 23 staffers met the benchmark of the VER program where the decision was majorly informed by a re-structuring of the business,” said Mworia.
The firm’s Chief Executive Officer further said the strategy boosted the firm’s capability of bouncing back to profitability in the 2019 financial year.
“Since then we have made positive steps; we have re-organized the management team after trimming the size of the organization,” Tumbo said during the release of the group’s full-year results of the financial year 2019.
The group announced to have recorded Sh114 million profit after tax, during the 2019 financial year.
Sanlam Kenya Chief Executive Officer Patrick Tumbo attributed the improved growth to a turnaround in investment strategy such as restructuring its bond.
“We have reorganized our management portfolio and gotten rid of all investments that bogged us down in the recent months and we have moved out of corporate bonds until the regulations envisaged come into place,” he added.
The group’s gross underwritten premium increased by 10.25 percent to hit Sh7 billion while investment income stood at Sh2.35 billion during the review under period.
Total income grew by 50.8 percent to hit Sh9 billion as investment hit Sh2.4 billion.
Sanlam’s net costs and policy holder benefits, however, fell to Sh4.8 billion from Sh51 billion it had registered during the review period in 2018.
Tumbo further promised the group’s investors of increased revenue from the insurance business at the close of 2020 financial year.
“In the year 2020, we expect the revenues and earnings from the group to grow from the insurance business and investments,” he reassured.
The company board has however not recommended a dividend payout to its shareholders.
In 2018, Sanlam (K) incurred a loss of Sh2 billion after it wrote off bonds owned by Kaluworks, Athi River Cement and Real People Kenya.