Express Kenya and Kakuzi are the latest listed firms to issue profit warnings, an indication of a tough business environment that most businesses find themselves in.
- In a statement, the board of Express Kenya Plc told investors, shareholders, and stakeholders that the company has been faced with adverse economic challenges this year which has significantly impacted its operational efficiency and bottom line.
- The board and management said their focus is to enhance the firm’s financials, improve efficiency, grow income, and reduce losses by executing new strategies and savings plans to weather the storm.
- In the case of listed agro processor Kakuzi, its anticipated drop in earnings is due to poor performance of the macadamia business which is expected to make losses due to a significant decline in demand and price in China, Japan, and the USA.
“The warehousing operations of Express Kenya have been severely low due to the decrease in demand and economic activity, leading to reduced earnings…by at least 25%,” said Dr Chris W. Obura, Express Kenya board chairman.
Kakuzi Chairman Nicholas Ng’ang’a said the firm is banking on its other crops especially avocado which is expected to post strong performance.
- Other listed firms that have issued profit alerts include Sameer Africa, WPP ScanGroup, Crown Paints Sasini, Car & General, KPLC, Centum, Unga Group, Longhorn Publishers and Nation Media Group.
- Profit alerts occur when a listed firm advises its shareholders, investors, or the public that its earnings will not meet expectations or can even drop to a loss.
- A company generally issues a profit warning before the release of its official results.