Sanlam Kenya Issues Profit Warning Amid Challenging Economic Landscape

Business
16. Feb 2024
67 views
Sanlam Kenya Issues Profit Warning Amid Challenging Economic Landscape

Sanlam Kenya, a prominent player in the Nairobi Securities Exchange, has issued a profit warning, signaling an anticipated increase in net losses for the fiscal year ending this month. The company attributes this downturn to surging finance costs and paper losses on government securities.

This announcement adds Sanlam Kenya to a growing list of firms, now totaling 13, on the Nairobi Securities Exchange that have released profit warnings in the current year. Notable names on this list include Kakuzi Plc, Express Kenya, Kenya Power, Unga Plc, Sameer Africa, Crown Paints, WPP Scangroup, Longhorn Publishers, Sasini, Car & General, Nation Media Group, and Centum Investment Company. These firms cite a challenging operating environment as a contributing factor to their diminished earnings.

Sanlam Kenya, in a statement, expressed its board’s perspective that projected after-tax earnings for the year ending December 31, 2023, are expected to be at least 25 percent lower than the earnings reported for the previous year. The company attributes this projected decline to prevailing high-interest rates leading to increased finance costs and unrealized fair value losses on its government securities portfolio.

Despite narrowing its net loss to Sh54.07 million in the year ending December 2022, down from Sh542.36 million a year earlier, Sanlam Kenya’s profit warning suggests a net loss of at least Sh67.5 million in the current financial year. This marks the fourth consecutive year of losses for the insurer, signaling a continued freeze on dividends.

Sanlam Kenya last distributed dividends in 2013, amounting to Sh4.50 per share, totaling Sh432 million, when its net earnings reached Sh1.25 billion. The company has urged caution among shareholders and the public when dealing in its shares.

According to regulations, companies are obligated to issue profit warnings at least 24 hours before publishing full-year results that indicate a drop in earnings by a quarter or more compared to the prior year. The Capital Markets Authority (CMA) encourages listed firms to release such notices as soon as awareness of a likely drop in profits arises.

These announcements serve as an early indicator, offering existing and potential shareholders insight into a company’s performance ahead of potentially startling financial results. As Sanlam Kenya navigates these financial challenges, it reflects broader economic uncertainties impacting companies in the region.

Comments

No comments has been added on this post

Add new comment

You must be logged in to add new comment. Log in
Experiened tech blogger with bias in all matters AI, gadgets and SEO
Tech Blogger



Categories
Entertainment
Business
Business Related Articles
Guides
General
General
Lately commented