Car & General Plc, has issued a profit warning, with the company expecting a 25 percent decline in earnings this financial year. This is according to a statement released by the company on October 30, 2023.
The Board of Directors blamed this dismal performance on a series of challenges including foreign exchange losses on US dollar exposures and inflation costs negatively impacting motorcycle sales in Kenya.
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This follows an 85 percent drop in profit from the first half of this year, when the company’s profits dropped from KES 629 million the previous year to KES 97 million this year this despite a 5 percent increase in turnover
“The performance was significantly affected by an 18 percent drop in sales at Kenya trading operations, high forex losses of KES 155 million due to the continued devaluation of the Kenyan shilling and Q1 demurrage costs in Tanzania of KES 123 million,” Said the company in a statement
Car & General also adjusted its financial year to end on December 31, as approved by the shareholders at the 2023 Annual General Meeting (AGM) held on March 23, 2023. The change in the financial year end will be reflected in the upcoming audited financial statements for the fifteen-month period ending on December 31, 2023.
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However, the Board remained positive stating “Whilst the challenging market conditions persist, the board remains optimistic that, despite macro-economic challenges, the group’s performance will improve in 2024 given the diversity of our business both in Kenya and across the region,”
Economic conditions in the region remain difficult with many companies announcing reduced profits this year.
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