TransCentury bounces back to profitability after serial losses

Diversified investment firm, TransCentury has bounced back to profitability after a loss-making streak driven by market forces; especially low activities in the infrastructure sector.

The financial results released on Monday for the first six months of 2024 show its net profit rose to Sh375 million from a loss of 1.6 billion in the corresponding half in 2023.

The profit was mainly powered by an increase in revenue to Sh3.09 billion, up from Sh2.76 billion during the first six months of 2023.

The improved results saw the firm become the biggest gainer at the Nairobi Securities Exchange (NSE), with its share price selling at Sh0.72, 31 per cent up compared to the previous trading day.

Its subsidiary, the East African Cables was on the other hand the third biggest gainer at the Nairob bourse, with its share rising by close to 10 per cent to close the day at Sh1.24.

The company says the growth was driven by robust performance across key business segments, and the execution of strategic initiatives including healthy pipeline generation, innovative products and services, improved efficiencies and market development.

“The board and management are happy to note the Group’s return to profitability despite a very challenging operating environment. We continue being guided by our strategy (Ahidi +32 per cent) which is bearing fruit as evidenced in the positive results,’’ the firm said in a statement.

The strategy focuses on its core – Investments to drive sustainable, organic growth, innovation and diversification guided by internal and external data and emerging trends, investing and developing strong brands that will deliver superior value to shareholders and entrenching a culture of execution and accountability.

The firm’s earnings before interest, taxes, depreciation, and amortization for the period rose to Sh389 million compared to Sh145 million the corresponding financial year. It is back to the regular reporting circle, with the full-year results expected by April 30.

In the full-year results 2023, TransCentury recorded an operating profit of Sh356 million compared to a loss of Sh2.77 billion in the precious year.

In 2023, the firm completed its Rights Issue, a significant milestone in realizing its strategic plan. The transaction generated Sh828 million from the sale of 752,825,555 new ordinary shares.

Late last year, the firm and its subsidiary; East African Cables received a reprieve after the High Court temporarily blocked Equity Bank from placing them under receivership for the next four months for defaulting a Sh5 billion loan.