The giant investment company Centum Investment reported a KSh1.37 billion full-year net loss for the period that ended on 31st March 2021, from a net profit of KSh4.6 billion in March 2020, as it grappled with the negative effects of the covid19 crisis.
During an investor briefing, Centum CEO James Mworia said that in the last financial year the company faced several challenges that affected its bottom line. Centum‘s biggest hurdles were its loss-making subsidiaries like Longhorn Publishers and Two Rivers Development Limited which booked a loss of KSh1.9 billion due to high finance costs associated with the development.
“The boards of Two Rivers Development Limited (TRDL) and Two Rivers Lifestyle Centre (TRLC) have initiated steps to restructure the balance sheets in order to reduce the interest-paying debt and significant progress towards this objective has been made,” the company said in its financial statement.
Centum posted a KSh875 million profit from its real estate business, KSh330 million profit from its financial services business, a KSh529 million loss from its trading business, and a KSh1.9 billion loss from its Two Rivers Development.
The group’s total assets grew by 7% to KSh109.4 billion from KSh101.9 billion the previous year, supported by increased investments in marketable securities. Total liabilities incrased to KSh61.5 billion from KSh52.6 billion in the same period last year.
Centum said it expects to return to profitability in this financial year. “We have witnessed a strong recovery in performance across our portfolio companies and we hope that this recovery will not be interupted by any unforseen external economic shocks,” the company noted in its financial report.
The investment company also noted that its decision to pay down the debt on the company balance sheet and increase the marketable securities portfolio has remarkably improved its resilience and enhanced its liquidity position enabling Centum to take advantage of opportunities as they emerge.
Given the challenging circumtances the company faced in the last financial year, Centum Investment changed its dividend policy of “pay the higher of 30% of annuity income or prior year dividends,” to a dividend policy in line with the covid situation. The firm’s board recommended a final dividend of KSh0.33 per share, 73% lower than the KSh1.20 final dividend payout in 2020. The payout will amount to a total KSh218 million.