Kenya | NSE

BAT Kenya navigated varied macroeconomic headwinds to post a 19.2% y/y softening in net earnings to KES 5.57Bn over the year ended December 2023.

On a monthly perspective, the market indices recorded an upward trend with NASI increasing by 0.1% m/m. In our view, this points to a mild recovery in the equities segment, underpinned by broad expectations of interest rate declines in 2024.

EABL Group trailed under the impact of varied macroeconomic headwinds to post a 22.1% y/y decline in net earnings to KES 6.78Bn over the six months to December 2023. Profitability margins were compressed by a faster surge in operating expenses relative to net sales growth, coupled with an elevenfold jump in foreign exchange losses over the period under review.

During the month of December, the indicative indices recorded a mixed trend with NASI increasing by 0.2%, NSE-20 increasing by 0.3% and NSE-10 decreasing by 0.5%. Foreigners remained net sellers taking the selling position to KES 1.35Bn taking the YTD net selling position to KES 12.53Bn, lower than the KES 24.04Bn recorded in 2022.

Half Year Earnings Season - During the month we had HY’24 net earnings releases. Centum posted a 66.97% y/y reduction in net losses to KES 426.37Mn in HY’24. Nairobi Business Ventures results saw PAT soar by 8.3x to KES 32.25Mn from KES 3.87Mn in HY’23. Eaagads recorded a 188.87% slump in PAT to a loss of KES 33.10Mn. Williamson Tea posted a 101.42% jump in PAT to KES 477.11Mn – declaring an interim dividend of KES 10.00. Kapchorua Tea posted an impressive 87.76% increase in PAT to KES 218.10Mn accompanied with the declaration of a KES 10.00 interim dividend. Safaricom Group, registered a 10.06% decline in PAT to KES 27.19Bn driven by a quicker surge in operating expenses and finance costs.

I&M Holdings recorded a remarkable 14.29% y/y rise in after-tax profits (PAT) to KES 8.20Bn over the nine months to September 2023. The trailing earnings per share (EPS) momentum similarly accelerated 767bps to KES 7.35 over the quarter. Profitability growth momentum was however dampened by a faster growth in pre-provision operating expenses (28.73% y/y), relative to the rise in operating incomes (19.37% y/y). The trailing return on Equity (ROE) nevertheless improved 90bps q/q to 16.50% while the trailing return on assets (ROA) rose 10bps q/q to 2.50%.