NSE chief executive Geoffrey Odundo monitors the daily tradings at the NSE headquarter on August 22 Four performers at the Nairobi Securities Exchange have had a tough first half of the year, reporting over 80 per cent drop in net profit.
Amid a slow down in the country’s economy, increased competition, and a cash crunch, CIC Holdings, NSE, Bamburi Cement and Standard group reported profits, albeit significantly subdued ones.
Speaking to the Star, Institute of Economic Affairs chief executive Kwame Owino said while there might not be a “one for all” reason for the slump registered across the firm’s it could be used as a telltale sign of the country’s current economic state.
Mpasho Flist
Read More..
“There could be a number of reasons for the poor performance depending on the specific firm’s industry performance, spanning from different factors of business,” he said.
During the first six months of 2019, Bamburi Cement reported a 96 per cent drop in profit after tax to Sh23 million.
According to the firm, this was on account of higher operational costs and a slowdown in cement uptake especially through the Standard Gauge Railway.
According to Kwame, the profit dip was justified as the cement-making industry has been underperforming since last year.
“Many firms in the sector have been experiencing a slowdown in demand which will undoubtedly impact profits,” he said.
This is evidenced by the suspension of Athi River Mining Cement from trading at the Nairobi bourse after the firm was placed under administration during the last quarter of 2018.Most recently, the East Africa Portland Cement Company laid off its entire workforce, which according to Owino highlights the plight of the cement sector in the country.Data by the Kenya National Bureau of Statistics show cement exports in the January-June period sharply declined from to Sh362.28 million from Sh1.04 billion.CIC Insurance, on the other hand, reported a 96.1 per cent drop in net earnings to Sh20.9 million in the half-year ending June attributable to major losses in the life insurance business.“Subdued investment environment and yield curve deterioration (relatively lower returns on longer-term bonds) has also resulted in high actuarial reserves,” the insurer said.Regional underwriter Jubilee Holdings, listed on the stock market, also reported a marginal decline of 1.6 per cent in net profits to Sh1.83 billion during the review period.On the media front, Standard Group reported a 84.61 per cent drop in net profits to Sh19.4 million.Owino said that this […]
