Sanlam Kenya PLC has issued a profit warning for the fiscal year to 31st December 2023.
The insurance, investment and retirement firm has warned that its earnings after tax for the year ending 31st December 2023 will be lower by at least 25 per cent compared to what it posted for the year ended 31st December 2022.
“The projected decline in earnings for the year ending 31st December 2023 is due to the prevailing high-interest rates leading to increased finance costs and unrealized fair value losses on our portfolio of government securities,” stated Sanlam Board Chairman John Simba.
“This profit warning announcement is only based on the Management Accounts of the Company and a preliminary assessment made by the Board with reference to the figures and information currently available. The Shareholders of Sanlam Kenya plc and the public are therefore advised to exercise caution when dealing with the shares of the Company,” added Sanlam PLC Chairman.
However, Sanlam has assured its shareholders and the public that it will continue to focus on innovation, improving capital efficiency and digitizing its core business processes to improve its operational efficiencies, customer offering and sustainable shareholder returns.
Read: Weaker Shilling, Harsh Economic Environment Triggers Profit Warnings At The Bourse
Sanlam Kenya will become the ninth Nairobi Securities Exchange (NSE)-listed firm to issue a profit warning for the fiscal year ending 31st December 2023.
Other firms that have issued profit warnings for the trading period to 31st December 2023 include Nation Media Group (NMG), Car & General, Kakuzi PLC and Sasini PLC.
Others are Crown Paints Kenya, WPP Scangroup, Sameer Africa and Express Kenya.
In a notice to its investors, shareholders, stakeholders and the general public, Express Kenya PLC warned that its profit for the trading period will dip by at least 25 per cent compared to what it posted in a similar period a year prior.
Read: Express Kenya Issues Profit Warning On Low Income
“The company has been faced with adverse economic challenges this year which has significantly impacted its operational efficiency and bottom line,” stated Express Kenya.
“The warehousing operations of the company are still significantly low due to the decrease in demand and low economic activities leading to reduced income, further resulting to a negative impact on the business performance,” the firm added.
Listed agro-processing firm Kakuzi warned that its profit for the trading period to 31st December 2023 will shrink by at least 25 per cent compared to what it posted in a similar period in 2022.
NMG’s profit will also dip by at least 25 per cent as the Kimathi Street-based media house cited the weakening of the Kenya Shilling, rising interest, higher taxes and a surge in the global price of newsprint to the expected drop in its profits.
Car & General warned its profit for the fiscal year ending 31st December 2023 will sink by more than 25 per cent compared to the prior year on account of foreign exchange losses and deterioration of unit economies of motorcycles which hurt motorcycle sales in Kenya.
Listed agricultural firm Sasini PLC’s profit for the trading period to 30th September 2023 is expected to drop by at least 25 per cent compared to what it reported a year prior occasioned by the very high cost of production due to the unplanned escalation of input costs.
Sasini has also attributed the performance to the prolonged severe drought that hit the country during the first six months of the financial year which negatively affected coffee production volumes.
Read: Kakuzi Issues Profit Warning On Decline In Demand Of Macadamia
Paint maker Crown Paints Kenya PLC, Marketing and Communication group WPP Scangroup PLC and Sameer Africa have also alerted the public and shareholders that the profit for the fiscal year ending 31st December 2023 will drop by at least 25 per cent.
Crown Paints attributed the expected drop in performance to the increased cost of raw materials, increase in transportation costs and weakening of the Kenya Shilling against the dollar.
On the other hand, WPP Scangroup has attributed the expected dip in earnings to a subdued economic environment in the market which has led to cautious spending by its clients on advertising, marketing and communication.