Centum Investment Company Plc has today announced a Kes 2.05 billion pretax loss in the first half of the company’s financial year from a Kes 7.72 billion profit the company posted in a similar period last year. The company highly attributed the loss to the effects of the COVID-19 pandemic.
The firm, which owns shares in listed and non-listed companies in the manufacturing, banking and publishing sectors, said its investment and other income for the period to the end of September, fell to 433.5 million shillings from 12.4 billion shillings in the same period in 2019.
The Group’s consolidated comprehensive income reduced from Kes 6.6 billion to a loss of Kes 1.7 billion for the six-month period ended 30 September 2020, compared to a similar period in the prior year.
In the period ended 30 September 2019, the Group had recorded exceptional items including an investment income of Kes 12.4 billion, being realized gain from the disposal of beverage assets as well as Kes 2.3 billion impairment provision on assets, primarily, Amu Power.
The Company after-tax profit improved from a loss of Kes 1.6 billion to a profit of Kes 95 million. The Company also booked revaluation losses of Kes 1.4 Billion which contributed to a total loss of Kes 1.3 billion. In the period ended 30 September 2020, the company did not dispose any of its assets. In the corresponding period in the prior year, the company recorded a gain on disposal of Kes 2.2 billion.
Total assets declined by Kes 6 billion on account of the Kes 4.1 billion net debt repayment and the revaluation losses. As explained earlier the book value of shareholder funds declined by Kes 2.1 billion on account Kes 799 Million dividend payment and revaluation losses of Kes 1.4 Billion.
The Private Equity business recorded a Kes 1.2 billion consolidated after-tax loss for the period ended 30 September 2020 compared to an after-tax profit of Kes 8.4 billion recorded for a similar period in 2019. During the six-month period ended 30 September 2019, the Group completed the disposal of its stakes in three beverages companies, realizing a net gain of Kes 12 billion.
The Group has not received any dividends from portfolio companies where the Group holds minority stakes in the six-month period ending 30 September 2020 as these portfolio companies have elected to build resilience in their balance sheets by preserving cash. On a positive note, some of the companies have resumed dividend payment.
The Group held Kes 6.5 billion in marketable securities and Kes 1.7 billion in cash at 30 September 2020. At the onset of the Centum 4.0, the Group elected to reallocate the marketable securities portfolio to fixed income securities. Whilst the returns in these securities would be lower, this strategy ensures capital preservation and cash optimization.
As at 30 September 2020, 79% of the marketable securities portfolio was held in fixed income securities and cash.