Guests follow proceedings during the launch of a pension product by an insurance firm in Nairobi. FILE PHOTO | NMG Liberty Kenya Holdings has issued a profit warning for the year ended December 2021, citing the impact of the Covid-19 pandemic.
The Nairobi Securities Exchange-listed firm said its profit for the year is likely to drop by at least a quarter on the back of higher risk claims on the insurance business.
The insurance and wealth management firm posted Sh675.95 million net profit in 2020, a two percent drop from Sh689.61 in 2019 attributed to reduced investment returns on lower valuations of listed equities, bonds and properties.
“Based on preliminary unaudited consolidated financial results, the board of the company wishes to announce that the consolidated earnings after taxation for the year ended December 31, 2021, are likely to be lower by at least 25 percent than the audited earnings after taxation reported for the same period in 2020,’’ the firm stated on Wednesday.
“The impact of Covid-19 has resulted in significantly higher risk claims in 2021 negatively impacting the consolidated financial results.”
Companies are required by law to issue profit warnings at least 24 hours before they publish full-year results, which show that their earnings have dropped by a quarter or more compared to the prior year.
Other NSE-listed companies such as Kakuzi , Sanlam and Limuru Tea have also issued profit warnings.
Liberty shareholders will miss out on dividends for another year after the board of directors suspended dividends payouts following the drop in profits and the expected economic fallout of the pandemic on capital adequacy levels.