Listed paint manufacturer Crown Paints Kenya PLC has issued a profit warning for the financial year ending 31st December 2023.
According to Crown Paints, the profits for the period are expected to dip by more than 25 per cent compared to the previous year.
“The Board projects that based on the preliminary assessment of the unaudited consolidated accounts, the 2023 full-year earnings of the Group are expected to decrease by more than 25 per cent
compared with the year ended 31st December 2022,” stated Conrad Nyukuri, Crown Paints Company Secretary.
The group has attributed the expected performance to the increased cost of raw materials and an increase in transportation costs.
Moreover, a slowdown in economic activities in the country and a weakening of the Kenya shilling against the dollar have also influenced the expected drop in the group’s performance for the financial year ending December.
“Whilst the challenging market conditions persist, the Board remains optimistic that, despite macro-economic challenges, the Group’s performance will improve in 2024 given the diversity of our businesses both in Kenya and across the region,” added Crown Paints Company Secretary.
Read: Sasini Issues Profit Warning On High Cost Of Production
Crown Paints joins a list of other listed firms like Sasini, Nation Media Group (NMG) and Car & General that have issued profit warnings for the financial period ending December 31st.
Sasini PLC profits for the financial year are expected to shrink by at least 25 per cent occasioned by the high cost of production due to the unplanned escalation of input costs.
Similarly, Car & General’s profit for the fiscal year will also drop by more than 25 per cent due to the weakening of the Kenya Shilling against the US dollar while NMG’s profit will also sink by at least 25 per cent on higher taxes and surge in the price of newsprint.
Read: Car & General Issues Profit Warning On Dollar Strengthening, Surge In Finance Costs
For the half-year period ending June 2023, Crown Paints’ net profit fell by 87.2 per cent to Ksh37 million from Ksh288 million posted in a similar period the previous year.
“The decrease in profitability is attributed to increased cost of production due to overall increase in the cost of inputs caused by general inflationary pressure and devaluation of regional currencies,” stated the paints manufacturer during the release of its H1 2023 financial results.
The local currency crossed the 150-unit mark against the dollar, depreciating by more than 17.7 per cent against the dollar since the beginning of the year.