Sameer Africa has issued a profit warning for the full-year period ending December 31, 2023, citing the depreciation of the shilling against major global currencies, which it says has seen it incur substantial foreign exchange losses.
The firm anticipates its net profit for the period to drop by at least 75 percent, meaning it will not surpass Sh25.1 million. The company had posted a net income of Sh100.3 million in the prior year that ended in December 2022.
“Based on our unaudited third-quarter financial results and factoring in projected performance for the remaining period, the company’s projected net earnings for the period to December 31, 2023, are expected to be lower than 25 percent of the earnings reported for the same period in 2022,” reads a notice signed by company secretary Mercy Mbijiwe and approved by the Capital Markets Authority.
“The decline in forecasted earnings is attributable to the continued depreciation of the Kenya shilling against major currencies.
“This has seen the company incur substantial foreign exchange losses for the period arising from the translation of foreign-currency-denominated liabilities.”
The firm says it is currently implementing initiatives aimed at retiring the foreign-currency-denominated liabilities by next June.
Sameer’s announcement brings to 10 the growing list of listed firms that have issued profit warnings to their investors this year, pointing to heightened deterioration of trading operations in the country.
Others that have issued similar notices since March include Crown Paints, WPP Scangroup, Longhorn Publishers, Sasini, Car & General, Nation Media Group, Centum Investment Company, Unga Group and Kenya Power.
A good number of the warnings has been attributed to a tough operating environment that includes the high cost of doing business.
Sameer, which has launched the construction of a new Sh260 million industrial warehouse within its Nairobi complex as part of its expansion drive in the real estate business, reported a half-year net profit of Sh24.2 million for the period ended June, marking a drop from the Sh67.6 million posted in a similar period last year.
