Connect with us

Hi, what are you looking for?

Transcentury Group Chief Executive Officer Nganga Njiinu/COURTESY

Kenya

Transcentury Releases Delayed 2019 Financial results, Revenue Improves

NAIROBI, Kenya, May 17-TransCentury has reported a 34 percent revenue growth for the year ended December 31st, 2019 driven by performance especially in two of its subsidiaries.

The two subsidiary businesses Tanelec Limited and AEA Limited reported 56.8percent and 89.7percent revenue growth respectively.

The performance in both subsidiaries is underpinned by a robust orderbook, successful debt re-profiling freeing up operating cashflows and innovative working capital financing accelerating execution.

Tanelec Limited, headquartered in Arusha, Tanzania, is the leading manufacturer and distributor of transformers in the region while AEA Limited, headquartered in Nairobi, Kenya, provides solutions that enhance infrastructure efficiency and sustainability across the region.

In addition, the Group continued to create enormous commercial opportunities in line with its strategic plan through diversification of products, services, and geographical reach. The gains made have resulted in the Group returning to a positive operating profit.

Furthermore, significant progress in debt restructure has provided the businesses with the opportunity to access the much-needed working capital.

Since 2016 the Group has reduced 40percent of commercial debt, increased debt tenure with most tenures falling between 5-10 years and reduced debt service cashflow.

The progress made in restructuring debt has allowed the businesses in the Group to redirect more of the operating cash to fund the working capital and results can already be seen in the top line.

On the other hand, through increased efficiency and decisive actions to safeguard value by restructuring non-performing businesses, the Group has significantly reduced operating expenses with a 19.5percent reduction in 2019 and up to 46percent since 2016.

Advertisement. Scroll to continue reading.

However, as a result of the decision to restructure non-performing entities, there was a one-off impairment loss of Sh2.8billion related to goodwill carried in one of the scaled down businesses, without which the Group would have achieved a positive Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

Despite the significant one off non-operating impairment loss, the Group reduced the loss before tax by 12.9percent with the loss after tax declining by 12.4%.

While releasing the results, The Group Chief Executive Officer Mr. Nganga Njiinu said, “The aggressive top line growth despite scaling down in some of the businesses, confirms that TC capital re-allocation strategy and focus on key levers in the turnaround plan is bearing fruit.”

In 2019, we strategically scaled down operations in some of our portfolio businesses whose operating environment was incongruent with TC strategy and not supportive of the turnaroundadded Njiinu.

Most importantly the restructuring we have undertaken allow us to go to the next level of balance sheet restructure and clean up to reverse significant accrued liabilities linked to non-operating entities and special purpose vehicles (SPV’s) which will substantially improve our balance sheet.

1 Comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...