NAIROBI, April 16 Kenya's TransCentury Ltd.
said on Wednesday its full-year profits would be down a
quarter from last year due to a fair value loss from the sale of
its stake in a railway company, sending its shares 7 percent
The company said in a statement its sale of a 34 percent
stake in Rift Valley Railways (RVR) would erode its profit after
tax by 25 percent for the year to the end of December.
TransCentury said on Tuesday its pretax profit for 2013 fell
30 percent to 856.6 million shillings ($9.86 million). Profit
after tax was 626.4 million.
The company's stock was down 7.41 percent to 25 shillings by
0817 GMT on the lower 2013 earnings as well as the profit
warning, said Ian Gachichio research analyst at Kestrel Capital.
"In this market, lower earnings almost always coincides with
a decline in share price. We have the lower-than-expected 2013
profits and also the profit warnings," Gachichio said.
The company, which runs an electricity equipment maker and
an engineering services firm active in the nascent petroleum and
mining sectors in Kenya, sold its 34 percent stake in RVR to
Egyptian private equity firm Citadel Capital in March.
The $43.7 million received from the sale meant TransCentury
had recovered its entire cash investment in RVR, but the
proceeds were below the historical fair value of the investment.
The cash would be re-invested in the business, the firm said.
RVR, operator of the sole rail line linking Kenya's Indian
Ocean coast with Uganda, is set to face competition from a new
railway in the coming years after the Kenyan government broke
ground on building a standard-gauge line from the port city of
Mombasa to the Ugandan border in November last year.
($1 = 86.9000 Kenyan Shillings)
(Reporting by James Macharia; editing by George Obulutsa and