One of Kenya’s oldest companies, Sameer Africa, has joined the growing list of companies announcing profit warnings in 2023 blaming the weakening Kenyan shilling.
The profit warning by Sameer, addressed to investors, stakeholders and other interested parties hinted at dwindling fortunes.
“Based on our unaudited third-quarter financial results and factoring in projected performance for the remaining period, the Company’s projected net earnings for the period to 31st December 2023 are expected to be lower than 25% of the earnings reported for the same period in 2022,” the statement by Sameer Africa noted in part.
Notably, in August 2023, Sameer Africa’s Board announced the company’s financial results for the period between January and June 2023. The earnings revealed that the company had earned a profit after tax of Kshs24 million.
In comparison to the unaudited financial results for the same period in 2022, this was a drop in earnings of 64 percent.
Additionally, in 2022, for the six months from January and June 2022, the company had earned a Kshs67.6 million profit after tax.
Also Read: Top Kenyan Companies That Have Warned Investors So far and Why
Weakening Kenyan Shilling cited as Cause of Woes
Further, Sameer Africa explained on the reason for pessimistic outlook in forecasted earnings, blaming the depreciating Kenyan shilling.
“The decline in forecasted earnings is attributable to the continued depreciation of the Kenya shilling against major currencies. This has seen the Company incur substantial foreign exchange losses for the period arising from the translation of foreign-currency denominated liabilities,” the statement explained.
Of note, the Kenyan shilling has been on a major freefall for the whole year. In the first six months of 2023, the Kenya Shilling depreciated by 13.94% against the US Dollar ranking it the sixth worst performing currency in Africa.
However, the company noted that in response to these challenges, it was implementing initiatives aimed at retiring the foreign-currency denominated liabilities by June 2024.
Consequently, in light of the warnings, Sameer Africa urged the public to exercise prudence when engaging in transactions involving the company’s shares.
“The shareholders of Sameer Africa PLC and the public are therefore advised to exercise caution when dealing with the shares of the Company,” the statement warned.
Also Read: Another Company on NSE Issues Profit Warning
About Sameer Africa
Sameer Africa is one of the most valuable stocks traded on Nairobi Securities Exchange (NSE). It is a public limited company first incorporated in Kenya in 1969 as Firestone East Africa Limited.
Further, Sameer is involved in the sourcing, importation, and sale of tyres, tubes, and flaps and letting of investment properties.
Also, it is 72.15% owned by Sameer Investments Limited, making Sameer Investment the major shareholder of the business.
In Kenya, the company has offered direct and indirect jobs to over 30,000 people.
