Express Kenya in red as loss of EABL contract bites

Transport and logistics company Express Kenya has slipped into loss for the full-year ended December in a further reflection of the dwindling fortunes of the NSE-listed firm, which is yet to recover from the hit of losing its key customer the East African Breweries (EABL) four years ago.

The logistic firm has for the second year in a row sent out a profit warning, saying it expects its net earnings to drop by over 75 per cent compared to the previous year’s Sh229,000.

Express Kenya suffered a sudden dip in fortunes after losing the EABL distribution business, a performance the firm’s management has been seeking to reverse by diversifying into real estate business.

“The company has been going through a period of business instability due to the loss of key contracts,” said Express Kenya’s CEO Hector Diniz in a notice.

“Given the circumstances, the company would like to caution the public that its financial performance has been affected and is anticipating announcing a loss.”

Express Kenya reported a net loss of Sh229 million in 2011, a net profit of Sh13 million in 2012 and then a net profit of Sh229,000 in the subsequent financial year.

In 2012 and 2013, the firm had posted a net loss before tax of Sh13.2 million and Sh1.68 million respectively and the positive earnings were achieved as a result of Sh26.2 million and Sh1.9 million in tax credits.

Besides EABL, Express Kenya has in recent years also lost other clients to competitors due to theft incidents at its warehouses which also exposed it to huge legal liabilities.

The company plans to construct 1,200 residential houses on a 15-acre piece of land it owns in Nairobi’s Industrial Area.

“The board is in the process of diversification into the real estate sector,” said Mr Diniz.

Crown Berger, TPS Eastern Africa and Pan Africa Insurance Holdings, Sameer Africa, Sasini and TransCentury are among the firms that have announced profit warnings for their 2014 performance.