Centum Investment Company has posted a profitability in the half-year period to 30th September 2023 to hit Sh1.4 billion in net profit.
This is a complete turnaround from the Sh4.9 billion loss posted for the full year ended March 2023, and 454 percent improvement compared to Sh244million net profit reported in the first half of 2022.
Centum, Kenya's largest listed investment firm, attributed the performance to a sharp growth in investment income which grew by 152 percent to Sh1.8 billion.
Centum Group CEO James Mworia in a statement attributed the performance to The rise in annuity income and gains from investment operations.
“This was attributed to an overall improvement in performance of the underlying portfolio leading to an increase in annuity income and gains realized on investment operations,” said Centum Group CEO James Mworia.
Total comprehensive income for the period stood at Sh6.2 billion compared to a loss of Sh1.2 billion in the corresponding half year period.
The company generated Sh842 million in net cash flows from annuity income and proceeds from shareholder loan repayments, which was applied towards investment in portfolio companies, part repayment of debt and the ongoing share buyback program.
Gearing was reduced to 4 percent in line with the Company’s focus on deleveraging which saw the listed firm’s debt close at Sh2.19 billion at as of 30th September 2023.
The company has been in the market to raise funds to complete some of its projects.
This saw the company make an early repayment of its Sh2.95 billion bonds on Friday, offering a mix of cash and houses to bondholders.
In October 2023, Global Credit Ratings (GCR) affirmed Centum Investment Company Plc’s national scale, long and short-term issuer ratings of A+(KE) and A1(KE) respectively.
The strong credit rating considered the company’s debt reduction strategy over the past 5 years and the strong investment track record.
The commitment towards repaying the debt saw Centum Real Estate ink deal for a $20 million (Sh2.9 billion) loan facility from The World Bank to support construction of affordable housing units at Two Rivers.
The funds to be disbursed through International Finance Cooperation will finance the prime 104-acre mixed use urban node located within Kenya’s Diplomatic Blue Zone in northern Nairobi.
The total estimated project cost is $91 million (Sh13.2 billion), of which IFC will be financing US$20 million via the Loan.
In terms of the consolidated performance, which aggregates the financials of subsidiaries and the proportion of the performance of associates and joint venture entities, the group recorded a 67 percent improvement in performance compared to the first half of last year.
The Real Estate, Two Rivers Development, and investment operations all recorded improved performance.
“Despite the persistent global and local macroeconomic headwinds, we believe that there will exist pockets of opportunities we can maximize through an active investment strategy to grow and preserve shareholder value,” said Dr Mworia. “We will continue pursuing the current value preservation strategy and maximize on growth opportunities.”