Investment firm Centum has booked a loss for the year ended March owing to Kes 1.9 billion loss suffered by Two Rivers Development Ltd where the firm holds a 58 per cent stake.
Latest audited disclosures show that Centum reported Kes 606 million loss in the year ended March being an improvement from Kes 3.4 billion loss in the trading period ending March 2020.
Centum is now in talks with their financiers with a view to restructure their Two Rivers Development Ltd loans by the end of the current financial year.
In October 2019, Centum’s chief financial officer Samuel Kariuki told Business Daily that the firm secured Kes 8 billion loan with Co-op Bank to set up Two Rivers, the largest mall in the region.
“Upon completion of construction and operationalisation of the mall, we sought to refinance the facility with Standard Bank (South Africa) into a corporate finance facility in which the Centum guarantee was dropped and the facility re-priced to reflect an operating business,” Mr Kariuki added.
The company said South Africa’s Standard Bank gave it lower financing costs than previously incurred with Co-op Bank.
Centum also attributed the loss during the period to the economic fallout caused by the pandemic as well as their “conservative asset valuation policy.”
In the year to March, Centum booked Kes 4.2 billion in asset revaluation losses compounding the firm’s total comprehensive loss to Kes 4.8 billion.
Centum’s total assets declined by Kes 9.3 billion to Kes 47.5 billion from the comparable period in 2020.
“The reduction in total assets was on account of debt repayment of Kes 4.1 billion, revaluation losses of Kes 4.2 billion, impairment provisions of Kes 1.1 billion, finance costs of Kes 603 million and operating expenses of Kes 858 million,” Centum CEO said in a statement.
The company’s net asset value per share dropped to Kes 62.85 from Kes 71.29 attributable to Kes 799 million dividend paid in 2020 as well as Kes 4.8 billion loss suffered during the year.
The profit wipe out is also attributable to the absence of exits from its private equity portfolio and increased impairment on development projects including the Akira Geothermal Project.
Further, Longhorn Publishers and Nas Servair, two firms where Centum has stake, have been particularly hit hard during the pandemic affecting the firm’s performance in the 12-month period to March.
The publisher for instance saw closure of schools in Kenya for an extended period while Nas Servair fortunes remain in turbulence as the aviation industry struggles to fly out of the Covid-19 economic storm.
Sidian Bank, another entity where Centum has interests is now returning back to profitability with an improved performance in the three months to March this year.
In the year ended March 2020, Centum booked Kes 12.4 billion, being investment income from the sale of Almasi Beverages and Nairobi Bottlers.
The shareholders will, however, receive a final dividend of 33 cents per share that will translate into a cumulative payout of Kes 218 million, being a 72 per cent drop from Kes 799 million paid out last year.