TotalEnergies Marketing Kenya has issued a profit warning for the full year ending 31st December 2024 citing higher finance costs owing to the elevated interest rates.
- The Nairobi Securities Exchange (NSE) listed firm says it expects a more than 25 percent decline in net profits for the full year 2024 compared to the same period in 2023, based on forecasted financial results of the firm.
- The high interest rates period experienced for the better part of the year led to increased finance costs amidst a challenging and unstable business environment, eating into the net earning of the company.
- However, the company holds a positive outlook mirrored by the gradual decline in interest rates, likely to ease financial pressures and in turn improve net income.
“The Board of Directors wishes to inform its shareholders and the investing public that the projected 2024 full year profit after tax is expected to decrease by more than 25% compared to the profit after tax reported in the previous year ended 31 December 2023,” the company said in a notice.
In the half year, TotalEnergies Marketing Kenya recorded a 14.1% jump in net profit to KSh 938.5 million driven by increased sales coupled with the eased tax burden. With the profit warning announcement, the company is likely to have faced a slower second half.
“The projected decline in the Company’s profit after tax was notably affected by the high interest rates which resulted in increased finance costs, compounded by a challenging and volatile business environment,” the company added.
TotalEnergies joins Kakuzi and WPP ScanGroup in issuing profit warnings this year, with the list narrowing compared to a year earlier. Profit warnings are issued to give shareholders a guide to a company’s performance in advance, especially in cases of a 25% or more decline in earnings compared to the prior year.
While companies are required to issue profit warnings at least 24 hours before publication, the Capital Markets Authority encourages an issuance as soon as the directors become aware of the anticipated drop.
The oil marketer, which trades under the ticker symbol TOTL at the NSE, closed the previous trading session at KSh 21.30, a year-to-date gain of 18.3 percent.
