Centum Investment Company Plc has issued a profit warning to its investors, with the company anticipating the net profit for the Financial Year 2023 to be at least 25.0% lower than last year’s loss of Kshs 1.3 billion.
Read more: Centum Announces Shares Buyback As Losses Persist
The declined performance is attributed to the impairment provision relating to the business operation of Two Rivers Development Limited (TRDL), the company that manages the Two Rivers Mall, where Centum owns a 58.0% equity stake in the business.
The Board of Directors for TRDL decided to impair its balance of the unsold assets from its balance sheet after it had offered assets for sale to its shareholders, including Centum, to align with its strategic focus of reorganizing its capital structure.
Read more: Unga Group Plc has Issued a Profit Warning, Projecting a Loss
During the financial year 2022, TRDL made a loss of Kshs 2.0 billion from Kshs 1.9 billion in the Financial year 2021, attributable to the increase in finance cost to Kshs 1.41 billion from Kshs 1.38 billion due to the Kshs 10.2 billion that was used to finance the construction of the Two Rivers Mall between 2013 and 2016.
The losses from TRDL continue to weigh down on the overall performance of Centum Investment Company Plc, given that International Financial Reporting Standards require that the financial performance of TRDL be fully consolidated into the group financials of Centum.
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