Industry

Automobile subsidiary lifts NBV to marginal net profit

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Summary

  • The increase from Sh74,000 reflects revenues primarily from Delta Automobile, the sole services provider for Shreeji Enterprises which operates a fleet of over 700 vehicles.
  • The company said it plans to expand the auto unit for repair and maintenance of heavy trucks into the regional market all the way to Rwanda.
  • NBV commenced its business operations as a wholesaler and retailer of premium leather products.

Nairobi Business Ventures (NBV) has posted Sh31.69 million in net profit for the half-year to September helped by revenues from new automobile units.

The increase from Sh74,000 reflects revenues primarily from Delta Automobile, the sole services provider for Shreeji Enterprises which operates a fleet of over 700 vehicles.

According to NBV, the auto division contributed revenue of Sh374 .4 million and contributed Sh36.8 million to the bottom line.

The company said it plans to expand the auto unit for repair and maintenance of heavy trucks into the regional market all the way to Rwanda.

“We intend to expand our automobile division by increasing the number of service centres every 200km from Mombasa up to Rwanda in the years to come. We expect this initiative to continuously add to the NBV revenues and profitability going forward,” Ceo Haresh Soni said.

NBV commenced its business operations as a wholesaler and retailer of premium leather products.

However, due to the economic recession and lack of demand, NBV opted to diversify its business into more sustainable industries such as the trading, manufacturing and service sector. NBV said this diversified business approach was taken to protect the shareholder’s interest and other stakeholders against ups and downs in the business environment.

Last year, the company which used to sell the K-Shoe brand of shoes, bought four companies — Delta automobile, Aviation Management Solution, Air Direct Connect and Delta Cement — to diversify revenue streams.

The aviation business was loss-making to the tune of Sh7 million despite raking in revenues of Sh19 million in the half-year.

The division, comprising of Aviation Management Solution, Air Direct Connect repair and maintain several aircraft including Bombardier Dash 8 Classics, Dash 8 Q 400, CRJ 100,200, Boeing 737- 200/300 models.

Mr Soni said the aviation sector is promising due to the growing demand by carriers for affordable maintenance services which they are able to deliver.

The company also plans to set up a cement plant in Mavoko with the ability to produce 1 million tonnes annually.

NBV Group said Construction plans for the cement factory are at an advanced stage which will further improve revenues to the company.

“Our planned Mavoko-based cement factory will cost-effectively produce high-quality cement by using the latest technology,” Mr Soni said.

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