Centum Investment announced on Friday that its profit after tax recorded a loss of Sh1.9 billion for six months to September down from a consolidated profit of Sh6.9 Billion in the prior period.
Centum said the poor performance was mainly due to a significant drop in investment income with the prior period investment income having included Sh12 billion gain on disposal of investments.
The firm said it did not conclude any investment transaction during the said period.
The Company Profit and Loss, the measure of Centum’s performance as an investment company, recorded a profit after tax of Sh95 Million, a spike from a prior period loss of Sh1.6 billion.
The improvement in performance at company level, according to Centum, was despite the lack of gains on disposal in the period and a significant decline in dividend income from portfolio companies as they conserved cash to navigate the Covid 19 crisis.
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The Company performance was helped by a reduction in financing costs, which reduced from Sh1.2 billion to Sh335 million following the full repayment of long term loans.
Net Asset Value Per Share went down from Sh71.29 to Sh68.14 and this, Centum explained, was due to the payout of a Sh1.20 dividend per share and Sh1.3 billion revaluation loss.
Total return in the period, a measure of total investment return as a proportion of the opening value of shareholder funds, was -2% as the firm sought to strengthen its balance sheet and enhance liquidity.
Centum paid Sh4.1 billion in loans reducing its net debt from Sh7.4 billion to Sh3.5 billion and maintained a high level of liquidity with cash and marketable securities closing at Sh8.2 billion.
Centum Real Estate, a subsidiary of Centum Investment Plc, repaid Sh3.75 billion shareholder loan to the parent company backed by a healthy pipeline of bulk land sales.
The company also recorded a strong performance in its residential development arm and increased pre-sales to Sh9.2 billion representing 73% of all units under construction.
Pre-sales collections rose from Sh1.95 billion to Sh2.65 billion in the six-month period, with the company projecting brighter months ahead as it weathers effects of the Covid-19 pandemic.
To conserve liquidity, Companies under Centum suspended dividend payment in the first half but they expect to start booking dividends in the second half of the financial year.
The marketable securities portfolio recorded an return of 11.5% annually as Centum pursued a strategy of capital preservation and enhancing liquidity and investment in fixed income securities.
