Listed logistics firm Atlas Africa Industries announced Thursday it made a net loss of Sh3.42 billion loss for the 18 months ended December 2015, largely blamed costs of discontinued operations in Kenya.
The UK-based company, which moved to shut down its Kenyan subsidiaries last December after a downturn in the oil and gas exploration sector, said the restructuring had significantly eaten into its margins.
“For the period under review we are reporting losses of $34.2m (of which $19.4 million relates to discontinued operations). As shareholders will recognise, the company was greatly impacted by the sector dynamics as well as significant bad debts within its operating subsidiaries,” said Atlas chairman Ian Mann in statement, adding that the market changes had forced the firm to change tack.
During the year ending June 30, 2015, Atlas reported a net loss of Sh1 billion, mainly attributed to cancelled service contracts for oil and gas companies operating in Kenya.
In 2014, it reported a net loss of Sh147 million that was followed by a Sh609 million loss for the half year period to December 2014.
The oil and gas logistics firm had earlier said that it faced “increasing creditor pressure” resulting from failure by some of its clients to settle debts and as a result decided to close its Kenyan operations and focus all of the company’s administrative functions and activities in Ethiopia.
Last November, Atlas announced plans to acquire East Africa Packaging Holdings Limited, a company set up to build a bottle manufacturing facility 45 kilometres north of Addis Ababa, Ethiopia.
Atlas owned three subsidiaries in Kenya - Ardan Logistics Kenya Limited, Ardan (Medical Services) Limited and Ardan (Civil Engineering).
Mr Mann however said he still exuded optimism of a turnaround especially with its Ethiopia Business.
“With significantly better economic dynamics and market opportunity, we have transferred our focus to Ethiopia and established an industrial division to take advantage of the rapidly growing consumer markets in-country with our first project being the Chancho Project, a new state-of-the-art glass manufacturing facility 45km north of the capital, Addis Ababa,” he said.
The company opted to remain listed at the NSE after exiting its Kenya businesses.
Atlas is also listed at the London Stock Exchange.
Subscribe to AM Premium and download ATLAS FY2015 results and more than 7000 others from Listed Companies in Africa (Annual Reports & Financial Statements).
