Car & General issues profit warning
By Francis Muli, October 31, 2023Automotive dealer Car & General has issued a profit warning for the 15-month period ending December 31, 2023.
A profit warning is issued when the profit of an entity is expected to slump by more than 25 per cent as compared to the preceding period.
“The Board of Directors of Car & General (Kenya) plc wishes to inform the Shareholders of the Company, potential investors and the general public that based on the assessment of the unaudited consolidated accounts for the period to 30th September 2023, the earnings for the fifteen month period ending 31st December 2023 of the Group are expected to decrease by more than 25 per cent in comparison to the prior year,” Car & General Company Secretary Conrad Nyukuri said in a statement.
“As approved by the Shareholders at the 2023 Annual General Meeting (AGM) of the Company held on 23rd March 2023, the financial period end of the Group was changed to 31st December and accordingly the next audited financial statements will cover the fifteen-month period ending 31st December 2023.”
The company has attributed the slump in performance to foreign exchange losses on US dollar exposures, a deterioration of unit economics of motorcycles which had a negative impact on motorcycle sales in Kenya, an increase in finance costs, and demurrage costs in Tanzania.
“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,” Nyukuri added.
Car and General profits last year
In the financial year ended September 30, 2022, Car & General recorded a Ksh679 million profit after tax, which was a 23 per cent drop as compared to Ksh887 million recorded during the same period in 2021.
In 2022, the company attributed the profitability drop to forex losses in Kenya of Ksh301 million and demurrage costs of Ksh139 million in the trading businesses, resulting from global logistical issues and localization of production.