A stronger Kenya shilling helped investment firm TransCentury to a full year profit of Sh579.9 million for the period ended December 2024 from a loss of Sh3.2 billion previously.
The swing back to profitability is attributable largely to a Sh1.2 billion exchange gain in the period from a loss of Sh1.4 billion previously.
The foreign exchange gain was complemented by higher revenues, which rose marginally to Sh6.69 billion from Sh6.57 billion as its cost base fell.
The cost of sales fell from Sh4.7 billion to Sh4.3 billion while operating expenses were unchanged at Sh1.6 billion.
“The group capitalised on favourable foreign exchange dynamics and a better foreign currency exposure management contributing to significant foreign exchange gains,” TransCentury said in a trading statement on Wednesday.
“Improved business operations continued to give us better results, most notably, gross profit soared by 27 percent, propelled by enhanced cost efficiencies and a strategic focus on high margin products.”
The investment firm highlighted an improved performance by subsidiaries including East African Cables Plc, Tanelec Limited and AEA Limited.
East African Cables Plc earnings before tax improved to Sh179 million from a loss of Sh20 million in 2023 driven by new products, market expansion and cost efficiencies.
Tanelec posted a 13 percent rise in pre-tax profit as AEA’s earnings before interest, taxes, depreciation and amortisation were up 54 percent.
The upbeat performance for the investment firm is, however, dragged down by auditor’s concerns over the company’s ability to remain in operations after overdue arrears on debt contracted from Equity Bank Kenya.
“As of 31 December 2024, the group and company had outstanding loans Sh9.8 billion and Sh4.4 billion respectively for which they had breached the loan covenants with the lenders,” auditors from RSM Eastern Africa LLP said.
Last week, East African Cables- a TransCentury subsidiary suffered a setback after the Court of Appeal declined to grant orders stopping Equity Bank from selling its four properties over a loan of Sh2.2 billion.
TransCentury is currently protected by a court order obtained in March and which stopped Equity Bank from taking over its assets for 90 days-a grace period that expires in June.
The lender placed the investment firm and cable manufacturer under receivership after rejecting a proposal to write off part of the bank’s debt owned by the companies.
TransCentury says it has been implementing initiatives geared toward balance sheet improvement efforts and expects the completion of the tasks to materially improve its balance sheet.
