Financial services company Sanlam Kenya has issued a profit warning announcement that predicts a probable 25 per cent drop in net earnings for the period to 31 December 2018 compared to the earnings recorded at the year-end in 2017.
The company has attributed the potential drop to the “recent 100 per cent impairment of financial assets covering corporate bonds investments placed in prior year periods in now distressed local enterprises, the general impact of slower economic growth, and continued interest rates capping effect withing the period under review.”
“This has adversely affected our non-bank financial services, investments, and returns,” the chairman of the Board Dr John Juma states.
The firm says that the management will create a turnaround strategy that will elevate the company’s performance through initiatives such as improved investment policy, leadership change and management re-organisation, and the uptake of contemporary IT tools to optimise operational efficiency.
“The Board remains optimistic that these initiatives among others will provide a good foundation to revitalise the business. Collectively, we remain committed to ensuring that the business is fine-tuned to deliver value for all our stakeholders,” the notice reads in part.
Earlier this year, Sanlam closed down its branches in Kerugoya, Chuka, and Migori in an effort to adopt a unified distribution model. The NSE-listed company recently appointed Patrick Tumbo as the new Group chief executive after Mugo Kibati stepped down earlier this year to follow other interests.
