alexa Taxes squeeze Crown Paints half year profit as revenues grow - Daily Nation

Taxes squeeze Crown Paints half year profit as revenues grow

Thursday August 22 2019

Rakesh Rao

Crown Paints CEO Rakesh Rao. FILE PHOTO | NMG 

BRIAN NGUGI
By BRIAN NGUGI
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The paint maker’s net profit stood at Sh29.2 million in the period compared with Sh40.7 million the corresponding period last year.

Crown’s revenues jumped 12.77 percent to Sh4.37 billion in the period from Sh3.87 billion a year earlier.

It said its tax expense jumped 55.42 percent to Sh77.1 million in the period from Sh49.6 million a year earlier.

The firm’s income statement does not show its total costs or a breakdown of the same, including administrative expenses and cost of goods sold.

Early last year, the Nairobi Securities Exchange — listed firm warned paint prices could go up locally between five and seven percent, citing rising prices of key raw materials.

Crown Paints Kenya Group chief executive officer Rakesh Rao had said the paint maker could be forced to increase the price of its premium brands following a global rise in input costs, primarily titanium dioxide.

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The manufacturer had also said earlier that difficult market conditions in all its subsidiaries in Tanzania, Uganda and Rwanda and especially Tanzania had cut its margins despite improvement in the Kenyan market which had triggered high demand for its products locally.

Mr Rao said the company is renewing its focus on the low-end segment of the paint market.

Crown claims 60 percent of market-share among the premium brands and 24 percent of the low-end segment.

“We are launching a new economy range for low-cost housing sectors, we have done a market survey the response is very positive. We are also eyeing the industrial and automotive sectors,” said Mr Rao.

“We want to raise our market share in the high-end segment to 65 percent and 35 percent in the premium segment in a year.”