List Of Kenya Companies That Issued Profit Warning In 2023 Amid Job Cuts

• A dozen Kenyan companies issued a profit warning for the year ending December 31, 2023
• The Nairobi Securities Exchange (NSE) listed companies cited tough business environment and reduced purchasing power
• Stanbic Bank Kenya's Purchasing Managers Index (PMI) for November 2023 showed that most firms experienced reduced operations and output levels, leading to job cuts

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

More than 12 companies in Kenya have issued profit warnings in the past year, up to December 2023.

A report by Stanbic Bank Kenya's Purchasing Managers Index (PMI) for November 2023 showed that most firms experienced reduced operations and output levels during the year under review.

The 12 Nairobi bourse-listed companies attributed the anticipated drop in profit to a tough operating environment exacerbated by the high cost of doing business, Nation reported.

Below is a list of a dozen companies that projected a drop in profit.

1. UNGA Group

Unga Group projected a 25% drop in profit, citing challenges in the economic environment, accelerated by the free fall of the Kenya shilling against the US dollar.

The group's Managing Director (MD), Joseph Choge, noted that the most affected business is Unga Limited, whose sales have dropped below target, leading to restructuring.

2. Express Kenya Limited

Express Kenya issued a credit warning for the year ending December 31, 2023, citing slowed economic activities and reducing demand for its warehousing facilities.

The company projected earnings at 25% less than KSh 74.8 million reported in 2022.

3. Kakuzi Plc

The agricultural-based firm projected that earnings would be at least 25% lower than last year's KSh 845.8 million.

"The anticipated loss is mainly due to our macadamia business which is expected to post a loss following a significant decline in demand and price in the global market," Kakuzi said in a profit warning correspondence.

4. Kenya Power

Kenya Power and Lighting Company (KPLC) issued a profit warning for the financial year ending June 2023.

KPLC projected a drop of at least 25% in net profit, and according to the year-end results, the utility firm posted a net loss of KSh 3.2 billion.

5. Car and General

Car & General (C&G) issued a profit warning for the 15 months ending December 2023.

The company projected at least a 25% drop in profit, down from KSh 96.6 million reported in the six months to March 2022, Business Daily reported.

6. Sameer Africa

Sameer Group Africa projected a 75% reduction in profit during the same year under review, Business Daily reported.

The Group cited the depreciation of the shilling leading to foreign exchange losses.

The company reported a net income of KSh 100.3 million in 2022.

7. Crown Paints

Crown Paints announced a 25% drop in its full-year earnings.

The company cited increased costs of raw materials, transportation costs, and volatility in foreign exchange rates, Citizen Digital reported.

8. WPP Scangroup

WPP Scangroup, a marketing and communication group, projected a 25% drop in profit for the year ending December 31.

The Group blamed this on the subdued economic environment, reduced output levels and purchasing power

The company said it incurred a one-off severance cost of KSh 178 million following its restructuring program.

9. Longhorn Publishers

Longhorn Publishers cited rising costs of paper, currency depreciation and reduced demand.

According to Business Daily, the company anticipated a drop in profit of at least a quarter of KSh 39.9 million reported in 2022.

10. Sasini Plc

Sasini announced a profit shrink of at least 25% during the same year under review.

The company attributed this to the high cost of production accelerated by increased fuel prices.

11. Nation Media Group

NMG warned that earnings for the financial year ending December 31, 2023, will be lower than those for the previous year by at least 25%.

The Group attributed the decline to the increase in prices of basic commodities, a drastic rise in fuel prices, runaway depreciation of the Kenya Shilling, rising interest rates and higher taxes.

12. Centum Investment Company's

Centum Investment expected its full-year profits to dip by 25% compared to the previous year.

The company attributed this to the sale of its subsidiaries, Two Rivers Development Limited (TRDL), due to reduced operations, People Daily reported.

Kenya companies reduce workers

This came as the number of staff in various companies continued to drop, compared to the stronger falls registered during the first COVID-19 lockdown.

According to the PMI, Kenyan companies shed jobs for the third month due to reduced sales and workloads.

The report noted that only 17% of companies were confident of growth linked to expansion plans and the launch of new products and services in 2024.