Centum posts fall in earnings

• The firm’s before tax profit declines from Sh407 million last year to Sh114 million

Centum Investment Ltd has reported a 72 per cent drop in pre-tax profit for the six months period ended September 30, 2009.

One of the oldest and largest investment companies in the country, Centum’s pre-tax earnings dropped from Sh407 million reported in a similar period last year to Sh114 million.

The firm’s investment income also fell from Sh281 million to Sh63 million, which is a 77.5 per cent decline.

In a statement sent through Nairobi Stock Exchange, Mr David Owino, the firm’s company secretary said the increase in operating costs by 74 per cent compared to the prior period was also as a result of timing difference from last year that hit profit.

Contacted, Mr James Mworia, Centum chief executive told the Saturday Nation that they have been operating in a depressed market adding that the firm has been buying more than selling.

“In such a market environment it is not good to sell. We have been buying more than selling. We expect to report better results as the market recovers,” said Mr Mworia.

Early this year, Centum investment acquired a 22.6 per cent stake in Carbacid Investments Ltd, a local carbon dioxide gas maker.

The company said the underlying value of its portfolio rose by Sh231 million. During the period, its net asset value per share grew by 5 per cent, from Sh11.48 as at March 31, 2009 to Sh12.06 as at September.

Mr Mworia said that Centum is looking at a number of options to secure funds to drive its investment plans.

One of the avenues that the company has publicly announced, is to issue a Sh2 billion bond in the first quarter of next year.

When it announced a halving of full-year pretax profit in May, Centum said it wanted to issue the five-year debt paper in the third quarter but it later moved this to the first quarter of 2010.

Most of Centum’s investments are in blue chip stocks on the Nairobi Stock Exchange. It has stakes in Safaricom, British American Tobacco, Kenya Airways, Barclays Bank, East African Breweries, CMC Motors and Carbacid.

It also has interests in Rift Valley Bottlers, a Coca Cola franchise, Kenya Wine Agencies, UAP Insurance, General Motors East Africa, Longhorn Publishers and catering firm NAS.