TransCentury Limited announced FY15 results, with loss per share improving 15.2%y/y, to KES 7.09. Poor performance reflected a much weaker 2H15, with its core subsidiary EA Cables, weighing down the company: FOREX losses (KES 1.1bn vs 184m) higher on depreciation of KES against USD, lower sales in export markets (weaker currencies against KES) and impairments of receivables (KES 372m vs 26m).
There was also increased depreciation (+18.1%y/y) due to commissioning of refurbished plants. While revenue rose 15%y/y to KES 11.8bn, gross profit declined 2%y/y to KES 2.5bn. Revenue performance was impressive as while the core power division revenues fell 30%y/y, the execution of some delayed projects helped the engineering business have higher sales (+97%y/y). Into 2016, TCL expects government purchases and robust construction sector to boost sales.
Other income (a key component of profitability in the past) fell 66.7%y/y to KES 94m. Profits booked on other income culminated to a write down of KES 1bn in 2015 related to the rail business. Operating expenses fell 3.2%y/y to KES 2.5bn, leading to an operating profit of KES 126m. By 1H15, TCL had managed to deliver an operating profit of KES 240.3m suggesting an operating loss in the 2H15. On financing, TCL reiterated its announcement of a settlement with bond holders that saw the reduction in convertible debt reduced to USD 40m. Details of dilution related to a new investor (Kuramo Capital) in the business announced early in 2016, were not provided.
Source; SIB, NSE
