Centum Real Estate Limited has issued a profit warning for the financial year ending March 31, 2022, for the second time in a row, revealing the financial woes the firm is going through.
The real estate firm recorded a 71.7 percent drop in net profit for the year ended March 31, 2021, owing to reduced demand of residential units in the fallout of the coronavirus.
In a statement to investors, Centum Real Estate managing director Kenneth Mbae attributed the 2022 fall in profits to lower revaluation gains on investment property.
“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,” Mbae said.
“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.
Centum Real Estate, a subsidiary of listed Centum Investment Company, reported a Ksh650.4 million net profit in the year ended March 31, 2021 from Ksh2.29 billion in a similar period in 2020.
The Company’s primary business is the sale of investment property and residential units.
“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 financial year,” Mbae added.
In 2021, Centum Investment Group, the parent company for Centum Real Estate, posted the first full-year loss in over 42 years, weighed down by a drop in sales and investment income that failed to stop it from paying dividends.
The firm, which was listed on Nairobi bourse in 1967 as Industrial and Commercial Development Corporation (ICDC) Investment and rebranded to Centum Investment in 2008, reported Ksh1.37 billion net loss in the financial year ended March 2021.
The loss was a drop from a Ksh4.63 billion net profit posted in the preceding financial year.
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