Summary
- The latest round of profit warnings brings to 14 the number of firms that have issued profit warnings in relation to the 2016 financial year.
- Other firms that issued profit warnings in relation to 2016 earnings include insurers Liberty Holdings and CIC Insurance, agriculture firms Sasini and Limuru Tea.
- Others are Family Bank, Mumias Sugar, Atlas Industries, Sameer Africa, the NSE, Deacons and RealPeople.
Plantation firms Kapchorua Tea and
Williamson Tea have joined a growing number of firms issuing profit
warnings this year, citing high labour costs amid lower tea earnings.
Troubled Pan-African housing financier Shelter Afrique has also issued a profit alert, indicating that its earnings will be hit by provisioning for bad debts.
The
latest round of profit warnings brings to 14 the number of firms that
have issued profit warnings in relation to the 2016 financial year, 12
of them being listed firms at the NSE.
Williamson Tea
reported a net profit of Sh738 million and Kapchorua Sh234 million for
the year ending March 2016, both of which will now decline by at least a
quarter for the year ending March 2017.
“The
anticipated decline in full year’s profit is attributed in part to
uneven and unpredictable weather patterns, but more so the primary cause
is an inability to control aggressive and rising labour costs,” said
Williamson and Kapchorua chairman Ezekiel Wanjama in a statement issued
jointly by the two firms, which share directors.
“With
high employee numbers, our anticipated wage and other benefits increases
dating back to 2014 require huge financial provisions which if repeated
would be unsustainable.”
He added that there is uncertainty in the future
wage bill because of on-going court cases touching on union and
collective bargaining issues.
Shelter Afrique on its
part had posted a net profit of $3.1 million (Sh320 million) in 2015,
but since then has come under the spotlight after its former head of
finance Godfrey Waweru blew the whistle on alleged book-cooking.
“The
main reason for the lower earnings in the restated 2015 results and
2016 is a sharp increase in the level of impairment charges to provide
for expected losses from the portfolio.
"The company
has identified the loans and has taken measures to manage the recovery
of the debts,” said shelter Afrique chairman Jean Paul-Missi.
Other
firms that issued profit warnings in relation to 2016 earnings include
insurers Liberty Holdings and CIC Insurance, agriculture firms Sasini
and Limuru Tea, Family Bank, Mumias Sugar, Atlas Industries, Sameer
Africa, the NSE, Deacons and RealPeople.
No comments :
Post a Comment