CIC Group Plc issues profit warning, cites adverse claims

CIC Insurance Group Plc has issued a profit warning for the 2019 financial year, citing adverse claims in some key lines of its business. The board said that based on the projections of the remainder of the year, the net profit for the financial year ended December 31, 2019 is expected to be lower by more than 25 per cent of the net profit reported for the same period in 2018. “The company has continued to register topline growth. However, we have experienced adverse claims in some key lines of business that has significantly impacted overall group profitability,” Gail Odongo, the Company Secretary said in a statement yesterday. Details of the company’s financial position will be disclosed in the financial results announcement for the year ending December 31 2019, expected to be published by end of March 2020. Financial services The Nairobi Securities Exchange-listed insurance and financial services provider joins a growing list of companies that have recently issued profit warnings for the year, among them East Africa’s largest power distributor, Kenya Power, industrial gas manufacturer BOC and UAP. Nairobi bourse has since joined the growing list of firms feeling the heat of the economic slowdown, announcing on Friday that its net earnings for the year ending December 31, 2019 will decline by more than 25 per cent. The self-listed company that posted a Sh190 million net profit in 2018 - a 12 per cent decline from the Sh216 million profit in 2017 - decried a poor market performance in the first nine months of the year, which saw the NSE 20-Share Index dropping to a 10-year low. “The performance of the company in 2019 was adversely affected by a challenging economic environment and reduced inflow of capital from global frontier market investors” the company said in its profit warning notice. The NSE’s share price closed Friday’s trading at Sh11.10 down from Sh12 a week earlier, representing a 7.5 per cent reduction in its value. The law requires all publicly listed company to issue profit warnings if they expect profits to be 25 per cent lower than the previous year’s. Despite the challenges, NSE has continued to put on a brave face and exude optimism terming the slowdown witnessed in the recent a past normal occurrence. Stock exchanges “NSE is undergoing an occasional five-year slowdown synonymous with most stock exchanges. We expect it to rebound in coming days,” NSE CEO Geoffrey Odundo said in a past interview. Since 2015, NSE has had no Initial Public Offering (IPO) and has seen only 10 listings in the past decade, exacerbating liquidly challenges for the bourse. In August, it announced an 81.9 per cent drop in its half-year profits, hitting Sh24 million down from Sh134 million posted same period in 2018.

CIC Group Plc issues profit warning, cites adverse claims

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CIC Group Plc issues profit warning, cites adverse claims

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