Mumias Sugar CEO Coutts Otolo at a media briefing in Nairobi on September 11. PHOTO | SALATON NJAU
What you need to know:
Negative investor sentiment arising from management and financial performance continue to dog Kenya’s largest sugar miller.
The firm has now lost over 91 per cent value since State sold investors the share at Sh49.50 late 2006.
The declining share price has seen the sugar miller move closer to matching the Sh1.30 share price infamously recorded by Eveready in 2012, which remains the lowest nominal price of a share at the NSE in recent times.
Mumias Sugar Company touched a new all-time low of Sh1.45 at the close of trading Thursday with a 58 per cent fall year to date.
MSC traded 1.5 million shares Thursday shedding 15 cents, equivalent to 9.3 per cent of its previous value.
The firm has now lost over 91 per cent value since State sold investors the share at Sh49.50 late 2006 translating into Sh25.24 billion capitalisation compared to Thursday’s Sh2.21 billion.
Some investors earlier in the same year bought the stock at Sh68.
Negative investor sentiment arising from management and financial performance continue to dog Kenya’s largest sugar miller ahead of Common Market for Eastern and Southern Africa lifting of quantitative restrictions on Kenya sugar imports.
“The company’s best hope is some kind of intervention from the government, although we don’t see any encouraging signs of this happening soon,” said an equities dealer at an investment bank who cannot be named without compromising his position.
The declining share price has seen the sugar miller move closer to matching the Sh1.30 share price infamously recorded by Eveready in 2012, which remains the lowest nominal price of a share at the NSE in recent times.
Financially, the company’s losses increased by 63 per cent in the year ended June 2014 on the back of higher costs.
It made a net loss of Sh2.7 billion in the period, which was worse than 2013 net loss of Sh1.6 billion.
The company did not declare a dividend.
The performance came as cost of sales rose 17.6 per cent to Sh12.2 billion, surpassing a 9.3 per cent growth in sales to Sh13 billion. It faces huge claims from creditors and business partners.
The NSE 20 share index closed 25 points lower Thursday at 5075, with major counters recording minimal movement in share price.
Banks, in the middle of third quarter results announcement season, had a quiet day with six of the nine listed lenders registering unchanged share prices.
Housing Finance recorded the only significant movement in the segment, gaining 2.9 per cent to Sh43.75.
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