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TransCentury upbeat of better earnings in 2012

CARTOON
By | March 24th 2012

By MORRIS ARON

Investment firm, TransCentury, has posted a 38 per cent jump in its pre-tax profits for the year ended December 2011 buoyed by a re-bound in the level of activity in power infrastructure and business opportunities.

The firm returned Sh869.3 million compared to Sh630.6 million a year before and subsequently declared dividends of 25 cents to its shareholders.

TransCentury Chief Executive, Gachao Kiuna

TransCentury Chief Executive, Gachao Kiuna, said the improved performance was the initial fruits of a recent strategy to re-structure and re-capitalise its businesses, which focused on areas that promise maximum growth.

"We are very optimistic of the future as our recent strategies for growth begun to pay off and we expect this trend to continue," said Kiuna.

High demand

"The discovery of minerals in the region, increased demand for electricity and rapid urbanisation in East Africa, have boosted our performance at a time the region was facing economic challenges."

The company’s revenues grew to Sh10.7 billion last year, up from Sh6.8 billion in the previous year. Its total assets rose by a whooping 93 per cent to Sh21.7 billion.

Earnings were the highest in its engineering division where revenues rose from Sh400 million to Sh2 billion after TransCentury acquired Civicon – a mechanical and engineering contractor and an out-of-gauge logistics firm with a customer base in downstream and up stream oil and gas across East Africa.

Civicon also has interests in power operation and manufacturing and several contracts with regional road construction firms.

In its power division, TransCentury recorded a revenue growth of 40 per cent from Sh5.5 billion to Sh7 billion.

Its subsidiary, East African Cables reported a 98 per cent increase in its profits for the year ended December last year.

TransCentury now plans to expand the operations of the East African Cables to Zambia and the Democratic Republic of Congo.

"We plan to expand our operations beyond East Africa to boost our profitability and also take advantages of those markets that are in dire need of services we offer," said Gachao.

Rail upgrade

In the Transport sector where the firm has a major shareholding in Rift Valley Railways, TransCentury said new equipment aimed at revamping railway lines are ‘in the high seas’ and that a change in the level of service delivery will be felt in the next 12 months.

The company plans to increase the level of contribution of the rail business to its profitability.

It also expects a continued organic growth within its power division, especially with a rise in demand for copper cables.

In addition, the devolved government structure, planned construction of real estate developments such as Konza and Migaa cities will also offer increased demand for utilities, explained the CEO.

"We are optimistic about the future of the company, especially as the foundations for growth begin to show returns," said Gachao.

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