TransCentury has recorded a sh2.8 billion loss, in what the company explained as a result of restricting non-performing entities.
“There was a one-off impairment loss of Kshs 2.8billion related to goodwill carried in one of the scaled down businesses, without which the Group would have achieved a positive Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)”, read a statement from a company.
It however boasted of a 34 percent revenue growth for the year ended December 31st, 2019 driven by impressive performance especially in two of its subsidiaries; Tanelec Limited and AEA Limited.
The two subsidiary businesses reported 56.8 percent and 89.7 percent revenue growth respectively.
Tanelec Limited, headquartered in Arusha, Tanzania, is the leading manufacturer and distributor of transformers in the region while AEA Limited, headquartered in Nairobi, Kenya, provides solutions that enhance infrastructure efficiency and sustainability across the region.
The company is restructuring its debt and since 2016 the Group has reduced 40 percent of commercial debt, increased debt tenure with most tenures falling between 5-10 years and reduced debt service cashflow.
“On the other hand, through increased efficiency and decisive actions to safeguard value by restructuring non-performing businesses, the Group has significantly reduced operating expenses with a 19.5 percent reduction in 2019 and up to 46 percent since 2016,” read the statement.
While releasing the results, The Group Chief Executive Officer Mr. Nganga Njiinu said, “In 2019, we strategically scaled down operations in some of our portfolio businesses whose operating environment was incongruent with TransCentury strategy and not supportive of the turnaround,” added Mr. Njiinu
The company is hoping to secure the right funding for the Group through commencing a Rights Issue process in the upcoming shareholder meeting scheduled for 10th June 2021.
The company explained that the Rights Issue has come from the interest expressed by the shareholders to participate in a fundraising transaction.
Proposed Rights Issue will be on the basis of five (5) new shares for every one (1) ordinary share held. Details of the Rights Issue to follow shareholder and regulatory approvals.
In July last year, the company announced that it will voluntarily delist from the Nairobi Securities Exchange (NSE), citing reduced liquidity in the capital market.
2020 performance outlook
The Group’s performance in the first half of 2020 resulted in a 21 percent decline in revenue as compared to the same period in 2019.
“Our focus now is on the fundraising pillar as we are comfortable that we have sufficiently prepared the business to receive funding,” added Mr. Njiinu.
The Group closed 2020 with a confirmed order book of sh14 billion and, hence, the focus to raise funds and execute on orderbook.