UAP holdings issue profit warning
UAP Holdings warned its shareholders that it could sink further into losses during the current financial year.
The firm, which has interests in banking, insurance, investment management and property development, has said it expects its earnings for the current financial year ending 31st December 2019 to be lower by at least 25% compared to the financial results it posted for the year ending 31st December 2018.
The firm’s board of directors has blamed this on the weakening performance of the property market in Kenya and the uncertain political environment in South Sudan, which it says will lead to a lower valuation of some of its investment properties.
UAP’s board, however, expects underwriting margins from its insurance business to improve.
During the last financial year, UAP holdings posted a pretax loss of 479.8 million shillings, marking a downturn in profitability from the previous year’s pretax profit of 1.33 billion shillings.
The loss was attributed to a combination of flat growth in insurance premiums, an increase in claims as well as decreased investment income.
UAP old mutual group, however, saw a turnaround in its performance during the first half of this year, in which it recorded a pretax profit of 517 million shillings, achieved on the back of a reduction in the firm’s staff and finance costs.
But the financial services firm’s investment income declined by 7.7% mainly due to the impact of property valuation write-downs.
UAP operates in Kenya, Uganda, Tanzania, Rwanda and South Sudan.