Car & General (C&G) made a net loss of Sh273.6 million in the 15 months ended December 2023, reversing a net income of Sh679.4 million in the 12 months to September 2022.
The latest results, which come after the company changed its financial year to end of December, showed the impact of foreign exchange losses and demurrage costs.
The Nairobi Securities Exchange-listed firm said Tuesday the weakening of the shilling in Kenya and Tanzania by 27 percent and eight percent respectively against the dollar hit it with a Sh645 million forex loss during the review period.
The forex losses, added to Sh181 million demurrage and storage charges in Tanzania, hit C&G with a combined exceptional cost of Sh826 million.
“The Tanzania trading operations suffered significant storage and demurrage charges during clearing processes due to logistical challenges,” said C&G.
The net loss for the period ended December 2023 was despite Sh27.24 billion in revenues or Sh1.82 billion per month compared with Sh19.4 billion or a monthly average of Sh1.62 billion posted in the 12-month period ended September 2022.
On the back of the loss, C&G has not declared dividends against the previous financial year when it declared Sh0.80 per share amounting to Sh64.2 million.
The firm said sales in Uganda and Tanzania accounted for more than 58 percent of group sales.
C&G runs five distinct business lines, including automotive and equipment distribution, real estate investment, financial services, poultry and helmet manufacturing.
“This diversity coupled with a broader geographical reach builds sustainability, and we are confident that each line offers scope for growth,” says the firm.
C&G said its motorcycle business experienced a 77 percent decline in sales volume in Kenya, which it attributed to the increase in the price of fuel that denied boda boda riders profitability.
The period under review also saw C&G’s finance costs double to Sh1.9 billion from Sh930.9 million, partly driven by the Sh645 million forex loss.
The firm’s borrowing hit Sh8.6 billion at the end of December last year from Sh7.12 billion at the end of September 2022. The increased stock of debt, added to a rise in interest rates, saw interest on borrowings double to Sh1.19 billion from Sh616 million.
C&G borrowings in dollars were at Sh4.22 billion or 49 percent of the total debt, followed by a similar amount in Kenya shillings and Sh178 million in Tanzanian currency.
The interest rate on Kenya shilling loans rose to 17.38 percent from 10.98 percent as that on dollar-denominated ones eased to 8.58 percent from 9.52 percent. Interest on Tanzania shilling loans rose to 13.4 percent from 8.99 percent.
