Sanlam House on Kenyatta Avenue in Nairobi. FILE PHOTO | NMG Food processor Kenya Orchards’ earnings for the half-year period ended June 30, 2018 have dropped, as Sanlam Kenya issued a profit warning for the period ending December 31, 2018.
Kenya Orchards on Monday said it had posted a 17.09 per cent drop in net profit to Sh999,622 from Sh1.2 million recorded during the same period in 2017 as administrative expenses rose by 829.53 per cent to Sh1.7 million.
Earnings per share dropped by 0.01 percentage point to Sh0.08 per share from Sh0.09 per share same period in 2017.
The firm has not paid dividends to ordinary shareholders for a couple of years.
During the period under review, revenue increased by 6.15 per cent to Sh34.2 million from Sh32.2 million recorded in half-year period of 2017.
At the same time, Nairobi bourse-listed non-bank financial services firm Sanlam Kenya issued a profit warning for the period to December 31, 2018, attributing it to the recent 100 per cent impairment of financial assets covering corporate bonds investments placed in prior year periods in now distressed local enterprises.
Sanlam Kenya also attributed this to general impact of slower economic growth and continued interest rate capping effects within the period under review.
Net profit for the period ended December 31, 2017 was Sh53 million from Sh94 million recorded during a similar period in 2016, a decline of 43.62 per cent.
“Based on our un-audited half-year financial results and factoring in figures and information currently at the board’s disposal, we wish to report that our projected net earnings for the period to December 2018 will be potentially 25 per cent lower than the reported earnings for the year ended December 31, 2017,” said the board’s chairman John Simba in a statement.
Prior to release of 2017 results, Sanlam had issued a profit warning in late 2016 which it later withdrew in February 2017 stating that fresh review of its liabilities had eased pressure on its bottom line.
The Capital Markets Authority requires listed firms to publicly issue a profit alert to warn investors of the risks of capital losses and lower dividends.