Listed manufacturer, Car and General, has posted Sh225 million in profit after tax for the year ended September 30, almost tripling the Sh79 million earned last year.
The firm, which assembles two and three-wheeled vehicles and other machinery, however, said the interest rate cap introduced two years ago has led to depressed sales volumes.
“In Kenya, volumes of our consumer business (two-wheelers and three-wheelers) made good progress,” said the firm in its financial report.
“However, due to the restriction on bank financing resulting from the interest rate cap, volumes in our equipment business (generators, construction equipment, tractors and forklifts) remained constrained.”
Total revenue stood at Sh10 billion, up from Sh9.6 billion reported in the last financial year, with the firm earning Sh339 million from investments in various assets.
Last year, Car and General signed a joint venture with US manufacturer Cummins on distribution and service of the latter’s machinery and equipment.
This year has however been marked by a drop in the sales of motorcycles attributed to the effects of market saturation and newly introduced traffic regulations.
Motorcycle dealers sold 105,000 units between January and July this year, an 11 per cent dip compared to 118,000 units over a similar period last year, according to latest data from the Kenya National Bureau of Statistics (KNBS).
Car and General plans to focus on growing investment income through capitalising on the land and property assets under its portfolio.
“We will embark on at least one property re-development in the next three months,” said the firm. “We hope to commence another property development by the end of 2019 assuming we can secure an anchor tenant.
“We expect these developments will improve our investment property yields and values.”
Directors recommended a dividend of Sh32 million (Sh0.80 per share) in respect of the year payable to registered shareholders and subject to approval at the company’s annual general meeting scheduled for March 25, 2019.