Diversified products supplier Car & General (C&G) has swung back to profitability, posting a net income of Sh526 million in the year ended December 2024 on a stronger Kenya shilling and lower operating costs.
The Nairobi Securities Exchange (NSE) listed firm reversed a net loss of Sh273.6 million in 2023, allowing it to resume distribution of dividends to shareholders after skipping previously.
The board of directors of C&G have recommended a first and final dividend of Sh0.80 per share or a cumulative payout of Sh64.1 million.
The dividend will be paid to shareholders on the register at the close of business on May 29 and will be payable on or about June 19.
The company’s finance costs fell to Sh393.7 million from Sh2.2 billion helped by a stronger shilling, which rallied in 2024, helping to cut the stock of debt and interest payments due on foreign currency denominated borrowings.
Additionally, the company’s operating expenses have eased to Sh2.6 billion from Sh3.2 billion a year prior.
The lower finance costs have helped trim C&G liabilities, most of which are dollar denominated, including borrowings.
“The group made a profit after tax of Sh526 million against a loss after tax of Sh273 million during previous financial year primarily due to favourable foreign exchange rates,” the company said in a trading statement on Wednesday.
C&G further realised Sh35.7 million in finance income last year from Sh20.7 million previously as net foreign exchange gains stood at Sh27.3 million, albeit lower than Sh297.9 million gains in 2023.
The lower costs helped offset a slower turnover as revenues dipped to Sh20.9 billion from Sh27.2 billion previously on reduced sales particularly of motorbikes popularly known as boda boda.
Compared to the decline in sales, the gross profit fell at a relatively slower pace from Sh4 billion to Sh3.2 billion, indicating that the company’s cost containment measures helped lift margins.
“The 12-month period from January 1, 2024, to December 31, 2024, was challenging.
“The Kenyan market remained constrained and, specifically, the boda boda business continued to decline to a monthly average of 4,600 units from a peak of 20,000 units per month in 2022,” said the company.
“This inevitably has a significant impact on our Kenya consumer business and for our Watu Kenya boda financing business.”
C&G has identified tailwinds to its business, despite the revenue pressures observed, including growth for its two and three-wheeler segments in Tanzania, the return to profitability for the Kibo business and the progress of Watu Simu—a lending arm allowing Kenyans access to smartphones.
The company sees more stability in its regional operations even as it expects volatility from ongoing global shocks.
“Going forward, we believe uncertainty will persist in 2025 given the challenging global geopolitics,” C&G said.
“We do, however, expect less turbulence in East Africa. Key to success will be maintaining strict fundamentals in terms of higher efficiency levels in all areas of our business.”
