lochaz-index wrote:Ericsson wrote:Key Highlights from the 2017 Financials;
Income from investment in property, which includes rental income, fair value movements in investment in property and investment in property funds, declined by 161% from 991 million in 2016 to a loss of Sh 607.3 Million.
Total income grew by 24.5% to Sh 27.8 Billion as commissions grew slightly by 4% to Sh 744 Million.
Revenues from its asset management business declined by 16% to Sh 848.4 Million
Gross earned premium increased by 13.4% to Sh 24.1 Billion as net earned revenue grew by 15% to Sh 21 Billion.
Net insurance claims increased by a huge margin of 1450% to Sh 12.5 Billion while expenses: grew 46% to Sh 27 Billion.
Profit before tax declined by 80% to Sh 866 Million while net profit for the period declined by 79% to Sh 527.5 Million.
The board declared a 17% increase in dividend payment to 35 cents per share compared to Sh 30 cents per share in the previous year.
The decline in income from investment in property is puzzling...massive decline for that matter. This isn't attributable to the change in valuation method so what exactly happened here? Rental income is regular and stable so we can rule it out implying the culprit is fair value movements in property and respective funds. Perhaps they had overstated the fair value of their holdings in property for previous accounting periods? Or a property fund took a huge haircut for its portfolio(the questions of why and why now need an answer)?
Gotcha!!!!
Yes the property holding may have drained a lot of revenue paid away as losses due to postponed lease failure to have Britam Tower ready for occupancy on time.
How much are they paying to tenants for that matter?
They were supposed to have the building ready by 2015-16 but still never and as a default they ended up paying an amount back to those who had leased.
What they say is a one of payment must have been an accumulation of such debts on property