Centum Real Estate has issued a profit warning for its 2022 income, indicating punctured cashflows for the giant firm.
In a statement issued to investors, the firm attributed its dwindling fortunes to ower revaluation gains on investment property in the year ended 2022 compared to those posted in the year ended 2021.
“The Board of Centum Real Estate Limited wishes to inform investors of the Company, potential investors and the general public that based on the preliminary assessment of its projected unaudited financial results for the year ended 31st March 2022, net earnings will be at least 25% lower than reported in the comparative year ended 31st March 2021,” said Centum Real Estate Managing Director Kenneth Mbae.
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“The decline in performance is primarily due to lower revaluation gains on investment property in the year ended 2022 compared to those posted in the year ended 2021. IRIS requires companies that hold investment property to conduct independent annual revaluations of their investment property and to pass gains or losses through their financial statements. The revaluation movements do not have any impact on the overall solvency or cash flows of the Company,” he added.
The Company’s primary business is the sale of investment property and residential units. Centum Real Estate has interests in Vipingo Development Limited, Centum Development Kenya, Uhuru Heights Limited and Pearl Marina Estates in Uganda.
“In the current financial year we expect to complete substantial sales of investment property at a significant value uplift to the original cost and in line with current valuation. We also expect to have a significant increase in completed sales of residential units relative to the prior fiscal year,” said Mbae.
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The company recorded 71.7 per cent drop in net profit for the year ended March 31, 2021, owing to reduced demand of residential units on the fallout of the coronavirus pandemic.
The property developer, a subsidiary of listed Centum Investment Company, reported Ksh650.4 million net profit from Ksh2.29 billion in a similar period in 2020.
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