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TransCentury back in profit territory, lifted by debt restructuring

By Frankline Sunday | August 31st 2016

TranCentury has recorded Sh1.19 billion in profit after tax, helped by restructuring of its debt portfolio.

The listed firm’s improved earnings for the first half of 2016 rose from a loss of Sh646.34 million recorded in the same period the previous year.

The lowering of its finance costs pushed the firm into profit territory for the first time in three years. The company said in a statement its net finance costs fell to Sh202.2 million, up from Sh496.96 million, which helped offset a 20 per cent drop in its revenues to Sh4.14 billion during the period ended June 30.

Turnover however went down 20 per cent, up from the Sh5.2 billion recorded in 2015 to Sh4.1 billion as at June 30, 2016.

“Despite a decline in revenues, the group ended the half-year in a profitable position, positively impacted by the recognition of write-back on convertible bond following the successful resolution in March 2016,” stated the company in a statement.

The company managed to chalk Sh1.75 billion in profit from operations, up from Sh240 million made in a similar period last year.

TransCentury reached a settlement with its bondholders in March, halving its principal debt to Sh4.04 billion just two days before the bond’s maturity date.

The maturity of the first tranche of a Sh8 billion five-year convertible bond forced TransCentury’s shareholders into a debt-equity swap with lenders to prevent a default.

TransCentury, established as an investment club in 1997 by a group of wealthy Kenyans, mainly focuses on electrical equipment and engineering work.

The firm also has operations in Tanzania, Democratic Republic of Congo, Zambia and South Africa.

“The group is poised to report improved performance in the second half of the year as we continue on a growth trajectory with a growing order book in our power division,” it said.

“In our power division, we see a strong demand in our primary markets with continuation of electrification programmes and development of infrastructure projects in the region.”

TransCentury’s earnings per share rose to Sh4.97 from a loss per share of 2.16 shillings in the same period in 2015. 

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