Sanlam Kenya Plc’s half year results show a significant drop of 89% in its profits after tax. The profits dropped from KES. 282.2 million in the previous year to KES. 31.0 million. The company also recorded a decline in earnings per share from KES. 1.88 to KES. 0.10 and this was attributed to a recent rights issue that boosted shareholders fund by 118% to KES. 3.85 billion yet weakened earnings per share.
The company shed KES 140.2 million, which is a 76.3% drop from the KES 591.5 million profit it made the year before. Thus indicating that performance has dropped sharply. The company was still in the red because the expenses were rising faster than its gains, even though its investment returns grew by 34% and its insurance revenue grew by 6.1%.
The performance notwithstanding, Sanlam was able to finalize a crucial recapitalisation that saw the company revamp its balance sheet. Moreover, the company made a debt repayment drive which projected a 72% debt relief, after a completion of KES. 2.5 billion rights issue.
Following the rights issue, Sanlam Kenya’s majority owners, Hubris holdings and Sanlam Allianz Africa were granted an exemption from making a mandatory takeover offer by Capital Markets Authority after their combined control went up to 71.47%. As at now, the insurers task is to bring back the company’s lucrativeness despite its recapitalization.
Also Read: Sanlam Launches KES 2.5 Billion Rights Issue to Bolster Growth
