Car & General Kenya PLC has issued a profit warning for the financial year period ending December 31, 2023.
In a statement, Car & General noted that profits for the fiscal year are expected to decrease by more than 25 per cent compared to the prior year.
The leading supplier of automotive, power generators, construction and industrial engineering equipment in East Africa has attributed the dip to factors such as foreign exchange losses on US dollar exposures resulting in a significant strengthening of the greenback as the Kenyan shilling has weakened to an all-time low of 150 against the dollar.
Moreover, the group has attributed the deterioration of unit economics of motorcycles which hurt motorcycle sales in Kenya to the expected decline in profits in addition to demurrage costs in Tanzania and an increase in financial costs.
“The Board of Directors (the “Board”) of Car & General (Kenya) plc (the “Group” or the “Company”) wishes to inform the Shareholders of the Company, potential investors and the general public that based on the assessment of the unaudited consolidated accounts for the period to 30th September 2023, the earnings for the fifteen-month period ending 31st December 2023 of the Group are expected to decrease by more than 25 per cent in comparison to the prior year,” warned Car & General Company Secretary Conrad Nyukuri.
However, the board has remained optimistic that the group’s performance will improve in 2024 amidst the challenging market conditions, on the diversification of portfolio across the market in the region.
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Car & General joins Nation Media Group (NMG) PLC which has already issued a profit warning for the fiscal period ending December 31, 2023 whose profits are expected to dip by at least 25 per cent.
The Kimathi Street-based media house has attributed the financial woes to various shocks including the weakening of the Kenya Shilling, rising interest and higher taxes in the country.
Moreover, the increase in prices of basic commodities has also resulted in the global price of newsprint to surge and the drastic rise in fuel prices has also made the distribution costs of NMG rise.
For the half-year period ended June 30, 2023, NMG posted a 98.8 per cent decline in net earnings to Ksh2.9 million compared to KSh247.8 million recorded in H1 2022.
The decline in profitability was attributed to a rise in the cost of newsprint, depreciation of the Kenya Shilling against the US dollar and weak consumer spending.
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