BAD NEWS AS TWO RIVERS MALL IS COLLAPSING

Centum Investment Company Plc. on Tuesday, July 27 shared its results for the financial year ended March 31, 2021. The firm posted an after-tax loss of Ksh606 million, an improvement from the previous financial year when it posted a Ksh3.4 billion loss.

The board proposed a final dividend of Ksh0.33 per share which will translate to a cumulative pay–out of Ksh218 Million. The payment of the dividend is on the back on an operating profit of Ksh245 Million.

Centum cited prevailing economic conditions and impairment provisions (a permanent reduction in the value of a company’s asset) on fair valuation of the investment portfolio as accounting for the bulk of the loss.

Notably, Two Rivers Development Ltd. (TRDL) in which Centum holds a 58% stake posted a whopping Ksh1.9 billion loss for the year. Two Rivers is a mixed-use development known for its lifestyle offerings including the Two Rivers mall, apartments and recreational spaces.

Centum blamed high finance costs at Two Rivers as a result of the underlying capital structure for the loss and outlined steps it was taking to correct the situation.

The development was financed by Co-operative Bank to the tune of Ksh8 billion but after it became operational, Centum re-financed the project with South Africa’s Standard Bank.

“The boards of TRDL and TRLC have initiated steps to restructure the balance sheets to reduce the interest paying debt and significant progress towards this objective has been made. We expect the balance sheet restructure to be completed by the end of the current financial year which will lead to a significant improvement in the performance of the TRDL Group,” the company noted.

The investment company’s assets fell Ksh9.3 billion from the previous financial year to stand at Ksh47.5 billion.

“The reduction in total assets was on account of debt repayment of Kes 4.1 billion, revaluation losses of Kes 4.2 billion, impairment provisions of Kes 1.1 billion, finance costs of Kes 603 million and operating expenses of Kes 858 million,” Centum CEO James Mworia noted.

Various companies in which Centum holds a significant stake were also hit hard by the pandemic – including Longhorn Publishers and Nas Servair.

Schools in Kenya were closed for an extended period due to the pandemic hurting Longhorn which is among the biggest producers of textbooks, while travel restrictions saw the aviation industry take a hit with Servair no exception.

Courtesy Business Today