Carbacid Investments #ticker:CARB is set for its lowest earnings in 11 years, joining the growing list of companies whose profits have tumbled in the last financial year.
The firm with investments in carbon-dioxide gas production issued a profit warning on Wednesday preparing investors for a fall in profits for the financial year ended July 2019.
“Based on the company’s unaudited financial results for the first six months ended 31st January 2019 and the company’s second half forecast as regards the investment portfolio, profits for the full year is projected to be at least 25 per cent lower than the previous financial year,” said the firm.
With the warning, it means its 2019 net profits will not surpass Sh223.89 million. The last time its earnings were below this level was in 2008 when net profit was Sh166.76 million.
The anticipated drop will also mark five straight years of falling profits for Carbacid, which in the financial year ended July last year posted a net profit of Sh298.5 million.
It joins the list of Nairobi Securities Exchange (NSE)-listed firms whose earnings have reduced in the recent past.
Some of the most recent profit warnings include Kenya Re #ticker:KNRE, East African Portland Cement #ticker:PORT, Bamburi Cement #ticker:BAMB, Kenya Power #ticker:KPLC, Crown Paints #ticker:BERG, Housing Finance #ticker:HFCK, Sameer Africa #ticker:FIRE and Sanlam Kenya #ticker:PAFR.
Carbacid’s management says its half-year profit to January 2019 dropped by 36 percent to Sh105.3 million on account of reduced revenues and increased operating costs.
“Group profit after tax has been impacted by a substantial drop in the value of investments in equities in the NSE and Dar es Salaam Stock Exchange (DSE) by Sh48 million,” it said on Wednesday.
Last year, the firm paid Sh0.70 dividend per share amounting to Sh178.4 million.
“The NSE and DSE indices lost 15 percent of their respective values over the six month period and it is not certain that the markets will rebound sufficiently to recoup the drop in investment values by 31st July 2019.”
Management says that mining royalties and county government demands continue to put more pressure on operations and margins even as the group continues to scan for new markets.