Car & General Kenya Plc, a listed dealer in power generation, automotive, construction and industrial engineering products in East Africa, has posted a net loss of KSh 274 million in 2023, a performance the firm attributes to forex losses, demurrage, and storage costs as indicated in its profit warning.
- •Despite this performance, the company delivered a 12% year-on-year growth in turnover, the highest growth area being Tanzania at 36%.
- •Sales in Uganda and Tanzania now represent over 58% of Group sales.
- •Earnings per Share, which measures a firm’s profitability declined from KSh 8.55 in 2022 to negative KSh 3.33 in 2023.
According to the Car & General Board of Directors, during the fifteen-month period from 1st October 2022 to 31 December 2023, the firm experienced severe US dollar shortages in both Kenya and Tanzania markets as well as devaluation in the currencies of both East African countries, leading to total forex losses of KSh 645 million. Car & General was also hit by demurrage and storage charges of KSh 180 million in Tanzania, leading to a combined loss of KSh 825 million.
Car & General joins a growing list of listed firms that have fallen into loss-making territory due to tough business conditions, marked by a weakening Kenya Shilling, and inflationary pressure in 2023, which severely impacted their revenues and cost of production.
Kenya’s two-wheeler (boda boda) business was the worst hit with overall market volumes in 2023 dropping almost 77%. This was the result of unit price increases due to the devaluation, the increase in the price of fuel, and the general inflationary pressure which made in unprofitable to run boda boda business.
The company posted a net profit of KSh 679.5 million in 2022.
