Logistics firm Express Kenya issues profit warning
Posted Thursday, July 12 2012 at 12:03
Logistics firm Express Kenya has issued a profit warning for the year ended December as the loss of the lucrative East African Breweries (EABL) transport contract in July last year eroded its earnings.
The company expects its profit in the period under review to drop by more than 25 per cent compared to 2010 when it posted a net loss of Sh28 million.
This means that the company is projecting its loss to worsen to at least Sh35 million as it promised shareholders that it is re-engineering its business model to remain afloat, including hiring out of its trucks and workshop to rivals and laying off of staff.
“Express Kenya Ltd Board would like to notify its shareholders that the company has been going through a period of business instability and that the earnings for the year ended December 31, 2011 will be more than 25 per cent lower than the earnings in the year ended December 31, 2010,” Express said in a statement.
Express used to draw more than half of its revenues from transporting EABL’s products locally but the brewer transferred the business to rival SDV Transami, hurting Express’ fortunes. Its other business lines include freight services, warehousing, packing and removals.