Crown Paints Kenya Plc is the latest listed company on the Nairobi Securities Exchange – NSE to issue a profit warning to its shareholders and the public.
A profit warning is a public statement given by a company to inform its publics and investors of a predicted decline in its earnings.
In a statement, Crown Paints noted that preliminary assessment of its accounts shows that the 2023 full year earnings of the Group are expected to decrease by 25%.
The decline, according to the statement, is attributable to the increased cost of raw materials and increase in transportation costs.
In addition, Crown Paints cited volatility in foreign exchange rates and the slowdown in economic activities during the year as some of the factors for the expected decline.
However, the company assured its publics that it was working towards turning around the situation.
“Whilst the challenging market conditions persist, the Board remains optimistic that, despite macro-economic challenges, the Group’s performance will improve in 2024 given the diversity of our businesses both in Kenya and across the region.”
Crown Paints has been among the most valuable companies on the Nairobi Stock Exchange (NSE).
According to the NSE, Crown Paints, which trades as CRWN, closed the market at Ksh36 on Friday, November 24.
Crown Paints among companies that issued profit warning
The paints and coating solutions company now joins the list of several other companies to have issued a profit warning in the recent past.
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The WPP Scan Group PLC also issued a profit warning on Saturday, November 25, for the year ending December 2023.
According to a notice published on a local daily, WPP said its net earnings for 2023 are expected to be at least 25% lower than in 2022.
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The decrease, according to WPP, is due to the continued subdued economic environment in the country.
Car and General, an automotive company, also gave one citing deterioration of unit economics of motorcycles which had a negative impact on motorcycle sales in Kenya and an increase in finance costs.
In addition, Sasini Ltd cited a very high cost of production due to unplanned escalation of input costs while.
Similarly, the Nation Media Group (NMG) cited a weakened Kenya shilling and higher distribution costs arising from fuel prices.
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On Friday, November 24, the Federation of Kenya Employees – FKE issued a statement lamenting about tough times for businesses in Kenya.
The Federation reported that 40% of the employers in Kenya were mulling over the possibility of cutting jobs in a bid to keep up with increased costs of operating.
As per the report, high taxes and subsequent increment in fuel prices had affected most of the businesses hence the struggles.
