Housing Finance in steep profit plunge as BOC raises dividend

HF Group's #ticker:HFCK after-tax profit for the year ended June 2018 fell by 95.71 per cent to Sh6.83 million from Sh159.01 million in 2017.

The struggling mortgage lender, whose profit has been falling since 2015, blamed the steep slide on a 13.86 per cent drop in net interest earnings to Sh1.34 billion amid a 23.15 per cent jump in operating costs to Sh1.69 billion.

HF’s loan book shrunk Sh5.17 billion to Sh47.59 billion, while deposits contracted 3.02 per cent to Sh36.22 billion.

“Market conditions have largely not changed and this has impacted a great deal on the performance by various units within the group including our banking subsidiary HFC and property development subsidiary HFDI,” group managing director Frank Ireri, who will leave next March, said in a statement on Thursday.

Meanwhile, BOC Kenya #ticker:BOC increased its per share interim dividend for the half year ended June by 6.8 per cent to Sh2.35, up from Sh2.2 a year earlier on the back of higher earnings.

The dividend will be paid on or about October 15 to shareholders on record as of September 28.

READ: BOC Kenya posts 34pc growth in half-year net profit to Sh57m

The gas manufacturer reported a 34.1 per cent net profit growth in the half year ended June, helped by lower costs and foreign exchange gains.

The NSE-listed firm made a net profit of Sh57.3 million in the review period, up from Sh42.7 million the year before.

The firm recorded a foreign exchange gain of Sh7.9 million, reversing a loss of Sh9.3 million.

BOC did not disclose its costs whose decline helped it report higher earnings and compensated for a 5.5 per cent fall in revenue to Sh487.1 million.

The company has consistently paid dividends over the years even when profits dip, with the gas manufacturer sometimes tapping its retained earnings to make the distributions.

BOC specialises in manufacture and sale of industrial and medical gases and welding products.