Centum Investment Group (NSE:CTUM) has posted the first full-year loss in over 42 years, weighed down by a drop in sales and investment income that failed to stop it from paying dividends.
The firm, which was listed on Nairobi bourse in 1967 as Industrial and Commercial Development Corporation (ICDC) Investment and rebranded to Centum Investment in 2008, has reported Sh1.37 billion net loss in the financial year ended March 2021.
The loss is a drop from a Sh4.63 billion net profit posted in the preceding financial year.
The loss came on the back of its trading business, Two Rivers Development Group and investment business all posting operating losses.
Centum board shrugged off the loss and recommended a dividend of Sh0.33 per share amounting to Sh218 million, a rare gesture from a listed firm in the absence of a profit.
Available records saw that Centum, then trading as ICDC, was consistently in profits. It made Sh6.85 million net profit in 1979 and closed 2007 with Sh1.12 billion net profit before ushering in the Centum brand the following year.
The fall in net earnings was hugely driven by a drop in income from investment operations where operating profit fell from Sh8.2 billion to a Sh1.86 billion loss.
The drop in operating profit from investment operations was because the Group had last year booked Sh12.4 billion one-off gain from disposal of beverage assets. No such gain was there this year.
“The payment of the dividend is on the back of operating profit of Sh245 million the company recorded in the year and is intended to cushion our shareholders from the effects of the difficult economic conditions while allowing the company to retain liquidity, “said James Mworia, CEO at Centum.
The latest dividend payout is however a 72.5 percent cut from Sh1.20 per share amounting to Sh798.66 million that it paid out in the previous financial year.
Two Rivers Development Limited, in which Centum holds 58 percent stake posted Sh1.86 billion loss, an improvement from Sh5.96 billion loss posted before.
Centum also booked a Sh4.2 billion revaluation losses, further hurting the bottom-line.
“A significant contributor to the revaluation losses is the increase in deferred tax liabilities of Centum Real Estate subsidiaries which impacted the valuations of the real estate portfolio company,” said the firm.
