Sameer Africa #ticker:FIRE has widened its loss 15.8 times to Sh182.8 million in the first six months of 2019, with stock-outs and counterfeit products complicating its recovery efforts.
Group revenue for the period dropped by 20 percent to Sh930.2 million from Sh1.16 billion achieved in the previous year.
Its best-selling tyre sizes remained unavailable throughout the six-month period, sustaining the stock-out that was also witnessed the whole of last year.
“The group continues to focus on stabilising the supply pipeline to achieve optimal stocking levels,” the Nairobi Securities Exchange-listed firm said.
The sales revenues achieved in the first half of the year translates to just 31 percent of the Sh3 billion that the board had set as the target revenue for full year 2019.
Operating expenses during the period reduced to Sh339 million from Sh353 million spent during the previous half year, with the management attributing this to cost cutting measures.
Last year, the firm trimmed its headcount by 120, opening 2019 with 168 employees split in management and unionisable categories.
Finance costs during the period under review rose 40 percent to Sh42.5 million, showing increased expenses on servicing debt.
The firm closed the period in negative working capital position. Current liabilities outstripped current assets by Sh255 million, pointing to adverse position in terms of ability to service loans falling due in the next 12 months.
Sameer has not seen the best of times since taking the decision to close its manufacturing factory in favour of imports as it blamed this on influx of cheap imports from Asian countries.
The firm has been looking for ways to switch production to different factories. Information available in its 2018 annual report shows it has partnered with factories in China, India, Czech Republic, Italy and South Africa to diversify the sourcing of tyres. It was expecting the first batch this August as seeks to restore supply and regain market share.