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Daily Nation : February 28th 2014
DAILY NATION Friday February 28, 2014 RESULTS | Focus on EAC trade Business News 37 Airtel rolls out SMS system to boost farming BY NATION CORRESPONDENT Mobile phone operator Airtel Kenya has launched a mobile app to help farmers access information on market prices, advice, research and weather updates. Dubbed Airtel Kilimo, the system aids growers in decision-making to boost productivity as well as income. Airtel is seeking to bridge the gap between farmers and middlemen with this system. Some traders exploit growers by offering low prices for quality crops. Poor advisory services by extension officers in the sector especially in rural areas has also been an impediment to productivity. The new system is expected to drive up data and SMS usage and in turn, increase Airtel’s revenue as it ensures farmers get timely information through the network. “It is a simple mobile solution for farmers looking to improve the way they manage their crops,” said Airtel Kenya managing di- 760 The number that farmers will need to dial on the network to access the services UCHUMI SUPERMARKETS LTD & SUBSIDIARIES CONSOLIDATED INCOME STATEMENT AUDITED SALATON NJAU | NATION Kenya Commercial Bank chief executive officer Joshua Oigara (right) and chief financial officer Collins Otiwu during the bank’s full-year results briefing at the Hilton hotelyesterday. Low interest costs drive up KCB profit Bank makes Sh14bn for the financial year up from Sh12bn posted during the previous period BY RAMENYA GIBENDI @ramenyag firstname.lastname@example.org A reduction in interest expenses and a jump in profitability from the regional business pushed up Kenya Commercial Bank after-tax profit in 2013 by 18 per cent. The East Africa biggest lender by market value reported Sh14.3 billion after tax profit compared to Sh12.2 billion recorded in 2012. “This performance is aligned to our plan to strengthen our regional outfit through crossborder trade transactions on our one –branch-banking platform,” KCB group chairman Ngeny Biwott said during an investors briefing yesterday. Claims large share Regional business grew 60 per cent to Sh2.4 billion in profit before tax up from Sh1.5 billion recorded in 2012. KCB now claims a hold of 50 per cent of the market share in South Sudan, three per cent in Uganda, eight per cent in Rwanda, one per cent in Burundi and three per cent in Tanzania. Over the same period, inter- est paid to depositors fell by 31 per cent to Sh8.6 billion saving the bank almost Sh4 billion. This saw the total operat- ing costs rise marginally even with a one-off restructuring expense to streamline its workforce. “We have been encouraged with the reduction in our cost to income ratio from 57 per cent to 51 per cent during the year, a 570 basis points improvement,” said Mr Joshua Oigara, KCB’s chief executive. Net interest income grew by eight per cent to Sh33 billion from Sh30 billion the previous year. 30th June 2012 Kshs’000 Net Sales Cost of Sales Gross Profit Other Income Operating Expenses Profit from Operating Activities Finance Costs Profit (Loss) Before Taxation Taxation Profit After Taxation Profit Per Share Basic and Diluted Number of shares outstanding CONSOLIDATED BALANCE SHEET ASSETS NON-CURRENT ASSETS CURRENT ASSETS TOTAL ASSETS SHAREHOLDERS’ EQUITY AND LIABILITIES CAPITAL AND RESERVES Share Capital Reserves NON CURRENT LIABILITIES Term Loans CURRENT LIABILITIES TOTAL SHAREHOLDERS’ FUNDS AND LIABILITIES 1,327,133 1,330,677 2,657,810 80,309 2,203,769 4,941,888 1,327,133 1,598,279 2,925,412 200,000 2,448,121 5,573,533 COMMENTARY ON INTERIM FINANCIAL RESULTS FOR HALF-YEAR PERIOD ENDED 31ST 1,327,133 1,705,209 3,032,342 200,000 2,859,838 6,092,180 DECEMBER 2013 The corporate segment contributed half of our deposits. The strategy is to grow the SME and retail section,” Group CFO, Collins Otiwu Customer deposits in- creased by six per cent to Sh305.7 billion from Sh288 billion recorded in 2012 following a decision by the lender to release expensive deposits. “The corporate segment contributed half of our deposits but going forward the strategy is to grow the SME and retail section,” said the group’s chief finance officer Collins Otiwu. Uchumi Supermarkets Ltd has continued to record impressive sales and margins as a result of continued implementation of strategic positioning of new branches and investment in customer service initiatives, albeit toughening operating environment. In the first half of the 2013/14 financial year, the East African economies performed below expectation mainly due to low national budgets execution and poor absorption capacity of donor funds coupled with unfavorable fiscal macro-economic parameters. This led to lower than anticipated government spending with a subsequent negative impact on private sector spending. In Kenya, the slowdown was mainly attributed to austerity measures like suspension of government procurement before and after the March 2013 general elections and challenges experienced during the transition period of implementing the new devolution structure. The tourism sector was also subdued in addition to slow credit uptake during the period due to the high but stable bank interest rates and the Euro debt challenges. Lending and treasury instruments rates remained high due to low budget implementation arising from slow procurement. Inflation in Kenya was on the upward trend particularly in the second quarter of the 2013/14 financial year with a growth from a low of 3.2% in December 2012 to a high of 7.15% in December 2013 with a subsequent strain on disposable income. Further, insecurity in Uganda and Kenya continued to impact negatively on retail business following terrorist threats and actions during the period. Patronage of shopping malls inevitably decreased through the second half of 2013. In spite of the negative impact of the social, political and macro-economic dynamics, Uchumi has maintained steady top-line performance (sales) occasioned by continuous improvement in customer service and a consequent organic growth in customer numbers. We recorded net sales of Kshs.7.3 billion for the half year ended 31st December 2013 compared to Kshs.7.5 billion recorded in the half year ended 31st December 2012. We have continued with a cautious growth in our branch networks in carefully selected strategic locations geared towards reaching our customers in areas that were previously un-serviced by Uchumi. New branches opened in the first half were Mombasa City and Kisii in Kenya. Profits before tax for the half-year were Kshs.107million while the balance sheet grew by Kshs.519 million to stand at Kshs.6,092 billion as at 31st December 2013. Customer numbers grew from an average of 2 million per month in 2012/13 (or 24 million full year ended June 2013) to 2.3 million customers per month (or 13.8 million customers for the six month period ended in December 2013) Outlook into the second half is bright. Out of the six branches planned to open, two are already operational. The Mbale (Eastern Uganda) and Segerea (Dar Es Salaam) branches opened their doors in January and February 2014 respectively. Syokimau (KR), and Juja along the Nairobi-Thika superhighway shall open in March 2014, MauaMeru in April 2014 and Kisumu and Ukunda in South Coast to follow in June 2014. The Uchumi Rights Issue exercise, subject to CMA approval, is expected to also be concluded in the second half to provide funds to anchor the growth phase of the Uchumi Rescue Plan and working capital requirements for business growth. Beyond 2014, the future outlook in the whole region is positive and Uchumi positioning and preparedness is denoted it’s a wider retail network and maturity of the new branches. It is expected that there will be a slow return to positive macro-economic performance in the East African region as political certainty sets in. Government expenditure has already started increasing as infrastructural developments take root. Liquidity in the region has commenced improving with modest GDP growth being registered. The middle class disposable income growth is further starting to reflect in the retail sector with increased basket sizes being recorded. The Kenya government is expected to borrow some USD 2 Billion long term loan through a Euro bond. This should ease pressure on local interest rates and increase private sector credit uptake with favorable bank loan terms. BY ORDER OF THE BOARD. DR. JONATHAN CIANO CHIEF EXECUTIVE OFFICER 3,347,742 1,594,146 4,941,888 3,848,218 1,725,315 5,573,533 3,924,756 2,167,424 6,092,180 13,918,530 (11,407,227) 2,511,303 628,407 3,139,710 (2,711,285) 428,425 (25,082) 403,343 (129,366) 273,977 1.03 266mln 30th June 2013 Kshs’000 14,368,643 (11,600,148) 2,768,495 910,709 3,679,204 (3,177,240) 501,964 (16,062) 485,902 (128,892) 357,010 1.35 266mln Six Months to 31st December 2013 Kshs’000 7,286,101 (5,834,776) 1,451,324 293,529 1,744,853 (1,611,768) 133,085 (26,156) 106,929 - 106,929 0.40 266mln UNAUDITED rector, Mr Shivan Bhargava. It will focus on farmers engaged in maize, banana, mango, rice and beans farming. Airtel will work with organisations involved in providing farmers support so as to reach a wider audience and ensure they get accurate information. Farmers can access Airtel Kilimo through USSD on Airtel line by dialling *760#, they can also subscribe for SMS alerts at Sh3 per message.
February 27th 2014
March 1st 2014