TransCentury bounces back with Sh375m half-year profit

Embattled Kibaki-era infrastructure firm TransCentury returned to profitability in the first half of 2024, a significant turnaround for the company that has faced numerous challenges in recent years. 

According to the company’s unaudited financial results for the six months ended June 30, 2024, it recorded a net profit of Sh375 million, driven by strong performance across key business segments and the execution of strategic initiatives.  

This was up from a loss of Sh1.66 billion in the half-year period a year earlier. Its loss for the year ended December 2023 had widened to Sh3.2 billion from Sh2.7 billion previously.

“The Group delivered an exemplary performance, sustaining its growth momentum by recording a 12 per cent increase in revenue and returning to profitability,” the company said in a statement. “This was driven by robust performance across key business segments, and execution of strategic initiatives including healthy pipeline generation, innovative products and services, improved efficiencies and market development.” 

Other income also rose, bolstered by gains from non-core asset disposals. Additionally, the appreciation of the Kenyan shilling against the US dollar supported the Group’s efforts to reverse foreign exchange losses incurred in prior years. “The half-year 2024 results highlight the Group’s resilience and is an outcome of Management and Board efforts to turn around the business,” the company added. 

The board of directors while pleased with the return to profitability, did not recommend an interim dividend payout. 

Looking ahead, the company says it remains optimistic about its prospects. “The board and management are happy to note the Group’s return to profitability despite a very challenging operating environment,” the firm said.

“We continue to focus on delivering sustainable growth by leveraging opportunities within the region’s resilient and evolving economies.” 

The company said it would continue to execute key initiatives, including internal restructuring, divestment from non-core investments, and the sale of non-core assets to strengthen its balance sheet and improve cash generation. 

TransCentury’s return to profitability comes after a period of significant challenges, including financial difficulties and operational setbacks. Audit firm RSM Eastern Africa LLP, in its report on the firm’s full-year performance published yesterday, had drawn attention to a material uncertainty related to the company’s ability to continue as a going concern. 

The audit firm noted that the company incurred significant losses and exceeded its debt obligations in 2023.  

It added the firm had outstanding loans for which it had breached loan covenants with lenders. It said these factors, along with other matters outlined in the financial statements, have raised concerns about the company’s ability to continue operating in the future. 

Last October, the commercial court in Nairobi blocked Equity Bank from taking over TransCentury and its subsidiary East Africa Cables Ltd over a Sh4.8 billion loan row.