Revenue grows but falling stock values hit Britam’s bottomline

Money Markets

Britam headquarters in Nairobi. PHOTO | FILE 

By REUTERS and BDAfrica.com REPORTER

In Summary

• Profit after tax for H1 fell 77 per cent to Sh625 million, down from Sh2.75 billion in the same period last year.
• Net profit fell 67 per cent in the first half to Sh1 billion, hurt by lower valuations of companies it has invested in.

Kenyan insurer British American Investments (Britam) saw its profit after tax for the first half of the year fall dramatically to Sh625 million, down from Sh2.75 billion in the same period last year.

Pretax profit fell to Sh1 billion, hurt by lower valuations of the companies it has invested in, it said on Friday.

Britam posted an unrealised loss of Sh843 million on the value of its financial assets — shares it holds in other companies — compared with an unrealised gain of Sh2.86 billion in the same period last year.

“The decrease in our profits is as a result of the downturn in the performance of the securities market, which impacted negatively on the fair value gains from the financial assets,” said Britam chief executive Benson Wairegi in a statement.

“This downturn also affected other blue chip companies listed in the Nairobi Securities Exchange.”

The company has interests across eastern and southern Africa, according to its website.

Kenya’s benchmark NSE20 share index is down roughly 20 per cent this year in line with falls in other emerging markets.

Britam’s own shares have fallen almost 50 per cent so far this year.

Earnings per share fell to Sh0.32 from Sh1.45 in the same period last year.

However, revenue from its various business lines revenue grew by eight per cent to stand at Sh11.05 billion from Sh10.24 billion over the same period.

This boosted its asset base 39 per cent to Sh76.6 billion.

Mr Wairegi said that company will accelerate its property business to cushion itself from the volatile stock exchange.