Sameer Africa Plc has tripled its half-year profit to Sh108.8 million from Sh24.2 million, boosted by the appreciation of the Kenyan shilling.
The local unit’s gains have led to a revaluation of the company’s US dollar denominated liabilities, with the Group posting a net financial income of Sh56.7 million, compared to a loss of Sh69.7 million at the same time last year.
“Appreciation of the Kenyan shilling against the US dollar over the period resulted in a significant unrealised foreign exchange gain on translation of the US dollar-denominated liabilities, reported under finance costs,” Sameer said in a trading statement on Friday.
However, the company did not record any cost of sales in the period, marking an improved gross profit in the cycle when compared to the Sh26.6 million cost of sales in June 2023.
Sameer’s operating profit was lower at Sh72.3 million compared to Sh125.6 million previously, following an 81.5 percent jump in operating expenses to Sh126.5 million.
Despite the improved profitability, Sameer sees a challenging operating environment characterised by public finance risks, high interest rates and street protests.
“The challenging operating environment due to heightened public debt vulnerabilities and high interest rates has been further exacerbated by the protests sparked by the finance bill, which have resulted in increased uncertainty and lower spending. If prolonged, the operations of our clients will be negatively affected, leading to increased vacancy. We are proactively engaging with our clients to evaluate and mitigate this risk,” the company added.
The fully occupied property, which was handed over to the client in July this year, is expected to start generating rental income from the fourth quarter of 2024.
The company is also looking to dispose of its large land holdings over the next year, although it notes slow progress in the administrative processes at the land registry.
The board of directors of Sameer Africa Plc has not recommended an interim dividend for the period.
