Eveready East Africa booked a Sh452.4 million gain from the sale of assets, which lifted the battery company into profit in the year ended September 30 despite depressed sales in the wake of weak performance in the Kenyan market during the period.
The Nairobi Securities Exchange-listed firm posted an after-tax profit of Sh267.1 million for the 12 months to September compared to an after-tax loss of Sh206.5 million in a similar period a year earlier.
The troubled battery firm said on Wednesday the sale of its prime property in Nakuru helped shore up its net earnings, which also came under pressure due to the extended electioneering period.
“The sale of our Nakuru property which was finalised in the year under review led to a gain of Sh452 million from the sale proceeds.
“The proceeds were used to clear the company’s debts and provide working capital to support the business,” said Eveready managing director Jackson Mutua in a statement.
Its sales in the period under review, however, tumbled by 38.74 per cent (an equivalent of Sh214.3 million) to Sh338.9 million from Sh553.3 million in a similar period a year earlier, dealing a blow to recovery efforts.
“During the year under review we experienced a significant downturn in the economy following a prolonged period of electioneering, insecurity in certain segments of the market, weak credit growth creeping inflation and drought,” said Mr Mutua.
Eveready in the last week of December 2016 cut a long-standing pact with Energizer, saying the terms of the agreement restricted it from pricing products, personnel, and curtailed any diversification of its portfolio.
The firm opted to import similar products and retail them under the Turbo brand and has diversified into detergents and car batteries.
Mr Mutua said a turnaround strategy would focus on pushing the new business products.
“Going forward we will be committing our efforts on enhancing revenues and achieving profitability by focusing effort on key drivers of our business that will assist the business to generate sufficient revenues in order to bring the business to profitability within the shortest time possible,” he said.