It was a terrible last week for chief executive officers of listed companies some having to pose before cameras to reveal losses in billions of shillings offering a glimpse into the gravity of Covid-19 on corporate Kenya.
As companies rushed to beat the April 30 reporting deadline, it emerged that corporate Kenya has booked losses of over Sh60 billion and counting.
Zero dividends
So far companies that have made losses include Kenya Airways, Britam, Housing Finance, Kenya Orchards, Kenya Power, Standard Group, Airtel Kenya, Madison Life, UAP Life, Spire Bank, Old Mutual Assurance, CIC Group, Eveready East Africa, Real People Kenya, Occidental Insurance and Homeboyz Entertainment among others.
This now makes 2020 one of the most painful years for investors on the Nairobi Securities Exchange (NSE), who now have to deal with the twin problem of capital flight, which has depressed share prices on the bourse, and a cash drought as directors vote to declare zero dividends to preserve the much-needed cash to fight the pandemic.
The Kenya Revenue Authority (KRA) should also expect less money from income taxes collected from public companies. What is worse, the rate of unemployment is set to worsen given that firms struggling to keep afloat may have to offload staff or freeze new hiring until the sky is clearer.
Investors were treated to an agonising reporting period, reading financial statements of listed companies as they lined up to post record-breaking losses in a streak of negative performance ever to be witnessed in recent times.
First it was Kenya Airways that sent shivers through the Capital Markets when it reported a staggering Sh36.2 billion full year loss in March. The national carrier had broken its own record, to report its worst performance in history. Though it had been expected that the airline was going to take a beating from the lockdown, not even analysts expected it would be nearly three times the Sh12.9 billion loss it made in 2019.
At a global level, 2020 was one of the worst years for aviation sector following the unrelenting march of the Covid-19 virus around the world, which saw countries shut their borders to fight the pandemic.
Then Britam Holdings Plc came in last week, breaking its own record, after it reported a Sh9.1 billion full year loss. This was a huge change of fortunes compared to the Sh3.5 billion profit it made in 2019.
Declining fortunes Britam blamed its poor performance on a […]
