Nairobist Stocks and Markets Report

Equity Bank FY09 Pre-tax Profit Growth Slows down to 5%

Markets Editor — Wed, 03 Mar 2010 04:11:44 +0000

Equity Bank 2009 full year profit slowed down to a mere 5%, from Ksh.5.02 billion at the end of 2008 to Ksh.5.278 in the period under review, after recovering from a 15% half-year dip in profit. The bank late last year indicated it expected to record a 20% growth in profit for the full year, but this didn’t come to pass. An aggressive expansion program took a heavy toll on the bank that has over the recent years recorded double-digit growths in profits.

Earnings per share in 2009 rose to Ksh.1.14 from Ksh.1.06 a year earlier. Total operating expenses increased by 37% in the year to Ksh.10.5 billion offsetting a 24% growth in operating income which rose to Ksh.15.7 billion.
The bank’s net interest income went up by 39% to Ksh.9.2 billion; non-interest income grew by 9%. Total assets grew 28% to Sh100.8 billion from Ksh.78.9 billion in 2008; while the bank’s outlets increased to 155, including its operations in Uganda and South Sudan.

The bank’s Ugandan acquisition recorded a Ksh.400 million operating loss in the year under review, the Sudanese subsidiary and newly formed Equity Investment Bank lost Ksh.70 million each while opening of 27 new branches cost over Ksh.400 million. The bank’s total exposure to the highly cyclical and weather dependent agricultural sector stands at about Ksh.700 million.
The bank also saw its customer base increased by 33% to 4.4 million customers from 3.29 million a year earlier. Net loans and advances increased by 43% to stand at Ksh.63.4 billion from Ksh.44.2 billion; while customer deposits increased by 39% to Ksh.69.8 billion from Ksh.50.3 billion.

The banks initiatives such as the linking up of its ATM machines to M-Pesa and other mobile money transfer services are expected to enable it cash in on transactional fees.

Barclays Bank (K) FY09 Pre-tax Profits Rise 12%

Markets Editor — Wed, 03 Mar 2010 03:58:26 +0000

Barclays Bank of Kenya Full year pre-tax profits for the year ended December 31 2009 rose 12% to stand at Ksh.9.002 Billion from compared to Ksh.8.016 Billion the previous year. This was mainly attributed to effective cost controls and a significant drop in provisions for bad loans.

The bank raised its dividend per share to Ksh.2.50 from Ksh.2.00. Its loan loss provisions fell by 60% to Ksh.513 million from Ksh.1.28 billion in 2008. The bank’s total loan portfolio dipped, while deposits were flat at 126 billion shillings.
Total income dropped by a mere 1.28% to Ksh.23.3 billion from Ksh.23.6 billion in 2008, but total operating expenses dropped 9% to Ksh.14.3 billion. Heavy investments in government securities to Ksh.43 billion last year compared to Ksh.28 billion in 2008 paid off huge dividends for Barclays, evening out the lower interest income derived from its core business of lending. Interest income from government securities earned the bank Ksh.3.2 billion, a 23% rise compared to Ksh.2.6 in 2008.

The banks loan book shrunk by 13.9% to stand at Ksh.93 billion down from Ksh.108 billion in December 2008. This led to a drop in interest income from loans and advances from Ksh.13.6 billion to Ksh.14.3 billion

During the year, customer deposits dropped from Ksh.126.4 billion in 2008 to Sh125.8 billion last year. However, the cost of deposits fell from 2.3% in 2008 to 1.7%. Non performing loans stood at Ksh.7.5 billion during the year.

KCB Group FY09 Pre-tax Profit Rise 5%

Markets Editor — Wed, 03 Mar 2010 03:57:23 +0000

Kenya Commercial Bank, the biggest bank in Kenya in terms of assets, reported a 5% rise in its 2009 pretax full year profit to stand at Ksh.6.3 billion compared to 2008’s Ksh.6.012 billion. This was mainly attributed to gains in net income, debt recoveries and a fall in provisions for bad loans. Net income jumped 23% to Ksh.14.5 billion. However, a 30% increase in operating expenses to Ksh.15.9 billion offset growth realized in operating income of Ksh.22.9 billion.

Total assets increased by 2% to Ksh.195 billion, while customer deposits stood at Ksh.162 billion, a 28.3% increase from the previous year. Net loans and advances went up by 29% to Ksh.120.5 billion. Provisions for bad and doubtful debts reduced by 57% from Ksh.3.7 billion in 2008 to Ksh.1.6 billion in 2009. The banks debts recovery efforts realized Ksh.856 million, a 63% drop compared with Ksh.2.3 billion the previous year.

The bank maintained its dividend at Ksh.1 per share, totaling to Ksh.2.2 billion.
For another time, the bank intends to raise Ksh.15 billion in debt and equity to fund expansion in the region. KCB is the region’s largest commercial bank with 203 branches with operations in Kenya, Tanzania, Uganda, Rwanda and Southern Sudan.

EABL H1 Pre-tax Profit Drops 8%

Markets Editor — Wed, 03 Mar 2010 03:26:37 +0000

East African Breweries Limited pre-tax profit for the six months ended December 31 2009 dropped 8% to Ksh.6.2 billion from Ksh.6.7 billion in the same period last year. Revenue grew to Ksh.18.6 billion on the back of improved sales. Sales volumes fell 10% across the company’s regional markets, but its impact on sales was softened by price increments on several beer brands.

Operating profit dropped 6% to Ksh.5.5 billion, an indicator that the brewer is finding it difficult to keep a firm grip on its operating expenses.

Fewer investment opportunities have seen EABL return most of its cash to shareholders in the past five years. The company has paid out Ksh.27.4 billion in dividends since 2004 making it the best dividend share at the NSE, which also explains the stable share price despite a profit dip announcement. In the same spirit it announced an unchanged interim dividend of Ksh.2.50 a share.

Uganda Breweries, in which EABL has a 98.2% stake, reported a 2% drop in volumes and a 39% drop in operating profit due to cost pressures. In Tanzania volumes declined 14%. EABL is entangled in a legal dispute with SABMiller in Tanzania, a case where EABL is seeking to end a seven year contract and acquire SABMiller’s rival - Serengeti Breweries. This is expected to be finalized by April 2010.

The firm recently commissioned a new 80,000 bottles-an-hour packaging line and a brew house. Both facilities were built in the past year for about Ksh.3.5 billion. EABL also plans to invest Ksh.1.7 billion this year in expanding capacity to raise exports and snatch sales from informal brewers.

Mumias Sugar H1 Pre-tax Profit Rise 561%

Markets Editor — Wed, 03 Mar 2010 03:25:35 +0000

Mumias Sugar Co Ltd’s pre-tax profit for the six months ended December 31 2009 rose 561% on account of high sugar prices and effective cost cutting measures. The listed miller’s pre-tax profit increased from Ksh.231 million during the same period last year to Ksh.1.5 billion this period.

Net revenues for the miller rose 48.08% to Ksh.7.7 billion; earnings per share were up 518% at Ksh.0.68 per share compared with Ksh.0.11 per share, a year earlier. The company’s sugar sales went up 17% to 117,081 tonnes during the period mainly due to high sugar prices in the international market. Appreciation of the Kenya shilling during the period has also been favorable for Mumias, especially on dollar-denominated liabilities, mainly the long-term loan and costs of spares, fuel and fertilizer prices.

Net working capital rose 82.1% during the period from Ksh.1.35 billion to Ksh.2.46 billion. Total Net assets for the miller rose to Ksh.14.38 billion, a 4.88% increase from the previous period.
The firm crushed 1.1 million tonnes of cane, 19% higher than in the previous year. This produced 123,183 tonnes of processed sugar. The Company plans to commission an ethanol plant by October 2011 with a capacity to produce 22 million litres of extra neutral alcohol. The company is already producing 26 megawatts of electricity in a cogeneration plant.

Uchumi: Return to Profitability, Return to the NSE

Markets Editor — Wed, 10 Feb 2010 13:57:34 +0000

At last Uchumi Supermarket may be headed back to the NSE. A resolution passed in the 29th January AGM, where shareholder approved to have government debt and others creditors to be converted into equity. This will see the number of share in the supermarket chain raise to 262.5 million, with a share capital of Ksh.2.4 billion from Ksh.1.5 billion.

Return to Profitability

Sales revenue and gross profits grew by 21% and 13% (Ksh.1.44 billion and Ksh.200 million) respectively compared to 2007/8. These growth compared to 2006/7 was 83% and 82% for sales and gross profits respectively. Customer numbers recorded in the year increased by 33% to 16 million compared to the 2007/8 levels of 12 million. These positive growth results are attributed to focus and redefined business objectives together with operational efficiency, and the re-launched Uchumi brand in line with the URP.
The supermarket’s cost to net revenue ratio improved in successive years at 23.7%, 18.8% and 17.2% for 2006/7, 2007/8 and 2008/9 respectively. Profit after tax increased from operating loss of Ksh.257 million in 2006/7 to a profit of Ksh.95 million in 2007/8 and now at Ksh.421 million in 2008/9. Consequently earnings per share grew from a loss per share of Ksh.1.43 in 2006/7 to earnings per share of Ksh.0.53 in 2007/8 and currently to Ksh.2.34 in 2008/9.

Year	Sales Revenue (Millions)	Operating Costs (Millions)	Pre-tax Profit (Millions)
2007/8	6,792	1,254	106
2008/9	8,232	1,412	421
2009/10	11,980*	1,600*	495*

*expected

Current assets grew from Ksh.764 million in 2006/7 to Ksh.900 million in 2007/8 and Ksh.1,062 million in 2008/9. Over the receivership period inventory decreased by 3% in 2008/9 despite the 21% growth in business compared to 2007/8. Post receivership suppliers’ debt is in term, and total current liabilities after reclassification from term loans of Ksh.567 million stands at Ksh.1,800 million. Term loans principal of Ksh.340 million and interest charge of Ksh.80 million was settled during the 2008/9 year. The total term loan principal repaid since re-opening in July 2006 stands at Ksh.490 million with a total loan interest paid of Ksh.285 million.

Rea Vipingo FY09 Results Misses Its Projection

Markets Editor — Wed, 10 Feb 2010 13:55:02 +0000

In November 2009 Rea Vipingo projected a growth of 12.5% in their full year earnings on account of strong marketing arrangements, favorable weather conditions, a stronger shilling exchange rate and an upturn in the global economy. However the company’s 2009 full year results indicated an 11% decline in profit after tax of Ksh.148 million from Ksh.168 million reported in 2008.

The firm’s sales revenue went up by 1.1% from Ksh.1.35 billion to Ksh.1.37 billion. This was attributed to the decline in global sisal prices and the harsh drought for the better part of the year. In addition, the Tanga Spinning Mill continued to face volume and price challenges during the period. Profits arising from operating activities, also declined by 11.69% from Ksh.98 million to Ksh.86 million.

About Rea Vipingo
Rea Vipingo Plantations Ltd is engaged in cultivation of sisal and the production of sisal fiber. The company was listed on the NSE in 1996.

CMC Holdings FY09 Pre-tax Profit falls 39%

Markets Editor — Wed, 10 Feb 2010 13:52:45 +0000

Car dealer, CMC Holdings reported a 39% decline in its pre-tax profit for the year ended September 30, 2009. Coming a few weeks after the company issued a profit warning to its shareholders last month, an audited preliminary financial statement for the year under review shows that vehicle sales went up by a mere 2.1% from Ksh.11.5 billion in 2008 to Ksh.11.7 billion. However the company still commands a substantial market share and if recovery ensues demand might be stimulated, improving the company’s bottom line.

The firm’s firm’s profits declined from Ksh.1.3 billion to Ksh.807 million, due to a near 300% decline in the share of associate profits from Ksh.8 million to a loss of Ksh.16.5 million. The drop is associated to low activity in the major sectors which support sales of motor vehicles especially agriculture, tourism and banking (which reduced asset finance lending during the year).

Operating profit dropped 22.5% to Ksh.1.19 billion from 1.54 billion a year earlier. Similarly, the firm’s DPS was reduced to Ksh.0.35 from Ksh.0.45 in 2008, while EPS dropped to Ksh.0.93 from Ksh.1.59. Net current asset increased marginally by 5.1% to stand at Ksh.3.3 billion. Total assets grew 12.9% to Ksh.5.7 billion.

About CMC Holdings
CMC Motors Group Ltd., which is a subsidiary of CMC Holdings, is the largest company within the group and a player in the East African motor industry with exclusive distribution rights for Land Rover, Ford, Mazda, Volkswagen, Suzuki, Maruti, Nissan Diesel range of trucks (medium and heavy commercial) and buses, Iveco, Bobcat, New Holland and Case tractors.

Barclays Q3 Pretax Profit Grows Marginally by 4%

Markets Editor — Thu, 03 Dec 2009 19:07:41 +0000

Barclays Bank of Kenya Ltd. Pretax profit for the nine months ended September rose marginally to 4.22% to stand at Ksh.6.63 billion from Ksh.6.36 billion the same period in 2008. The bank’s earnings per share for the period rose to Ksh.3.4 from Ksh.3.2 the previous year.

Customer deposits dropped to Ksh.123 billion from Ksh.132 billion in 2008. Similarly, the bank’s loans and advances to customers reduced during the nine months by 9.7% to Ksh.96 billion. The bank also halved its loan loss provisions to Ksh.545 million from Ksh1.18 billion the previously period.

Cooperative Bank Nine Months Pre-tax Profit Rise 10%

Markets Editor — Thu, 03 Dec 2009 19:06:56 +0000

Co-operative Bank reported a 10% rise in pre-tax profits for the nine months period ending September 30. The bank recorded Ksh.2.85 billion up from Ksh.2.59 in the corresponding period in 2008. This was mainly driven by a 27% increase in net interest income from Sh3.9 billion to Sh4.9 billion.

During the period under review, net loans and advances increased by 24% from Ksh.48.7 billion to Ksh.60.5 billion. Non-funded income particularly fees and commissions constituted 40% of the bank’s revenue as total interest income increased from Ksh.5.1 billion to Ksh.6.5 billion.

Total customer deposits rose from Ksh.64.7 billion to Ksh.76.6 billion, representing an 18% growth. Total assets increased by 26% from Ksh.78.5 billion to Ksh.98.8 billion.

The bank’s operating expenses rose 16% to Ksh.5.37 billion from Ksh.4.6 billion in light of an extensive expansion program. 19 new branches have been opened this year, mainly through application of a leasing option for new outlets. The management find leasing of outlets to be cheaper and tax efficient.

Coop bank invested in an ICT switch, enabling Sacco members’ access to their money from any Co-op ATM Under the bank’s Sacco Link product. The bank projects to have 300,000 users by year end having issued over 140,000 cards.

During the year, the bank acquired Bob Mathews Stockbrokers and renamed it Kingdom Securities appointing all coop bank branches as its agents. The bank still plans to enter Southern Sudan with five branches and is currently negotiating a strategic partnership with the co-operative movement in Uganda and Rwanda. Recently, it launched a mortgage product, “Good Home”

Nairobist Stocks and Markets Report

Equity Bank FY09 Pre-tax Profit Growth Slows down to 5%

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Barclays Bank (K) FY09 Pre-tax Profits Rise 12%

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KCB Group FY09 Pre-tax Profit Rise 5%

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EABL H1 Pre-tax Profit Drops 8%

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Rea Vipingo FY09 Results Misses Its Projection

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