Growth in real estate sees Centum post Shs26b profit

The Pearl Marina project master plan in Garuga, off Entebbe Road, which Centum Investments is set to develop. MONITOR PHOTO

Kampala- Centum Investments realised 10.7 per cent growth in net earnings for the half-year period ending September 30, 2013, posting net profit of about Shs25.8 billion.

The Kenyan firm, which cross-listed on the Uganda Securities Exchange in 2011, indicated growth in the net profit from KShs806 million (about Shs23.3 billion) to KShs892 million (Shs25.8 billion). This was driven by growth in investment income which rose by 59.9 per cent to KShs1.19 billion (about Shs34.5 billion) over the period.
The firm’s group chief executive officer, Mr James Mworia, also attributed the positive results to growth in the firm’s private equity and real estate business lines.
The investment company’s total comprehensive income increased by 55 per cent while its assets under management increased from KSh21.7 billion (Shs629.3 billion) to KSh24.8 billion (Shs719.2 billion).
Mr Mworia said the firm obtained approvals for the Two Rivers development real estate project and that construction of the Two Rivers Retail and Lifestyle Mall in Kiambu area, Nairobi commenced.
He also revealed that approvals for the Pearl Marina project master plan in Garuga off Entebbe Road were also attained and ground breaking for the first phase is expected early next year.

With the above projects, Centum said is optimistic that it will post strong performance for the remaining months of the year.

Increased costs
Meanwhile, the firm’s finance costs increased to KSh298 million (Shs8.6 billion) from KSh103 million (Shs2.9 billion) on account of bond service (interest payments) while direct costs, including salaries, jumped from 74 per cent to KSh219 million (Shs6.3 billion) from KSh126 million (Shs3.6 billion).

The company raised KSh4.1 billion (Shs118.9 billion) late last year through two corporate bonds that pay investors an average interest rate of 13 per cent annually.

This translates into interest payouts of about KSh540 million (Shs15.6 billion) per year.

The money is said to be funding the firm’s aggressive investments in the region, including the Pearl Marina project in Uganda and the Two Rivers project in Kenya.


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