Listed automotive and engineering products seller Car & General (C&G) #ticker:C&G has announced a 10.16 per cent drop in earnings for the 12 months ended September, representing more than an eight-year low on the back of flat sales and rising debt provisions.
The firm listed on the Nairobi Securities Exchange on Tuesday reported an after-tax profit of Sh79.84 million for the period under review, compared to an after-tax profit of Sh88.8 million in a similar period a year earlier.
The firm which has operations in Uganda, Rwanda and Tanzania besides Kenya said its revenues were flat at Sh9.63 billion in the period compared to Sh9.73 billion in the previous year.
“(The decline was attributable to) weaker performance of the equipment business (generators, construction equipment, tractors and forklifts) resulting from the contraction in these specific markets due to constrained liquidity conditions, the drought and uncertainty during the elections process ,” said Car and General, managing director Vijay Gidoomal.
“(It was also attributable to) increased debtor provisions and specifically in the retail sector and inventory write-downs. The majority of these are non-recurrent.”
The company’s board of directors has recommended a first and final dividend of Sh0.60 per share subject to approval of shareholders.
The firm said it is banking on new product lines to grow revenue and income.
Car & General recently launched a revamped brand of its three -wheeled bikes, dubbed Piaggio City Petrol Tuk Tuk, in the Kenyan market.
The company has also partnered with financial institutions to enable consumers purchase the vehicles and pay by instalments. The tuk tuks have a retail price of Sh360,000.
Car & General is the franchise holder for Piaggio tuk tuks, Suzuki and TVS motorcycles, as well as Kubota tractors in its auto division.
“Trading conditions this financial year look positive now that political stability has returned,” said Mr Gidoomal.
“We expect reasonable growth in all businesses.”
Car & General inked a joint venture deal with US-based manufacturer, Cummins last March.
Cummins manufactures diesel engines, turbochargers, alternators and generators. “We expect this partnership to generate positive returns in the medium term,” said Mr Gidoomal.