Companies

Crown Paints profit drops 17pc

crown

A Crown Paints showroom at Westside Mall in Nakuru. The paint-maker has reported difficult market conditions in its subsidiaries. FILE PHOTO | NMG

High operating expenses pulled down Crown Paints’ #ticker:BERG net profit in the year ended December by 17.68 per cent to Sh183.8 million compared to Sh223.2 million the year before.

The firm’s revenues jumped 13.12 percent to Sh8.3 billion in the period from Sh7.35 billion a year earlier.

The paint--maker said difficult market conditions in all the subsidiaries in Tanzania, Uganda and Rwanda and especially Tanzania slowed down its margins despite improvement in the Kenyan market which had triggered high demand for its products locally.

“In Kenya, we had a stable economic growth, as the country’s economy recovered from the effects of the year 2017 which slowed down economic growth because of the prolonged election period,” said the firm.

“In Rwanda and Uganda, the political environment did not lead to a revamp in market activity especially in the construction sector. In Tanzania, the market faced the risks of slower growth due to uncertainty in the business environment, hence, profitability for the group remained under pressure.”

The firm’s income statement does not show its total costs or a breakdown of the same, including administrative expenses and cost of goods sold.

Despite the reduced profitability, Crown has proposed a dividend payout of Sh0.60 per share, maintaining the same level as last year.

This will see it pay out a total of Sh42.7 million for the period.

The paint manufacturer is in the list of over 10 listed companies that have announced profit warnings for 2018 results, showing profit drops of 25 per cent or more.