Centum CEO James Mworia addresses investors during the company’s release of its FY 2020 half year results on November 28, 2019 PHOTO | COURTESY Centum Investment has set aside Ksh.2.1 billion as provision for the eventuality of a loss from its funding of the distressed Amu Power Company.
The provisioning which is aligned to the IFRS 9 rules on expected losses has stemmed from the uncertainty of Amu Power’s planned coal plant in Lamu County which remains tied up in controversy.
“The provision is made in view of uncertainties surrounding the timely closure of this matters,” the firm noted on Thursday.
The loss-provision comes barely days since the withdrawal of the project’s support by the African Development Bank (AfDB) and the European Investment Bank (EIB) who sighted changed courses away from investments in dirty fuels.
Earlier in June, Amu Power which is majority owned by Centum Investment lost its environmental impact assessment license to further stack the odds of the project’s fruition.
In spite of the darkening clouds on the multi-billion shillings project, Centum Chief Executive Officer James Mworia is holding out for the realization of a return from the investment in the hope for better days for the delayed project.
“The provision does not in any way alter the prospects of Amu Power. As responsible investors, we will do our best to pursue a return on investment,” he said.
“This is a long-lead projects where the ups and downs are usually a norm.”
The implementation of the 1050 megawatt Lamu coal plant has remained in limbo as the project further comes up against litigation and subsequent uprisings from civil society groups who view the plant as an environmental hazard.
From the one-off provision in Amu Power, Centum total assets reduced marginally to Ksh.63.4 billion from Ksh.65.5 billion with the company’s net asset value (NAV) similarly dipping by 4.2 percent to Ksh.50.2 billion.
Nevertheless, Centum posted a net profit growth of 226 percent to Ksh.6.8 billion for the first half of the 2020 financial year to September 30 with the notable surge in earnings being largely determined by increased investment income.During the financial review period, the firm managed to see off its private equity exit from the consolidated Almasi beverages for Ksh.18.6 billion to free up liquidity for the company’s future investments.Further income arose from the firm’s real estate portfolio with Centum reporting a 63 percent pre-purchase deals for its 1316 housing units under development.As such, Centum improved its […]
