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Financials

UPDATE 2-Kenya's Centum to start building coal power plant in Dec

* Posts 75 percent rise in first-half pretax profit

* Net asset value jumps 8.6 pct to 52.1 shillings per share (Recasts with power plant, adds analyst, NAV, share price)

NAIROBI, Nov 11 (Reuters) - A consortium including Centum will start building a 1,000 megawatt coal-fired power plant in Kenya next month, the investment firm said on Wednesday as it reported a 75 percent jump in first-half pretax profit.

Centum is the biggest investment company on the Nairobi bourse with interests in real estate projects, listed firms, private equity and electricity generating plants, among others.

Chief Executive James Mworia said the consortium, known as Amu Power, expected to finalise debt financing agreements for the project with China’s ICBC and South Africa’s Standard Bank by early 2016.

“We have the construction contract more or less finalised. They are ready to roll. We expect to begin work on site in December, and we expect the contractor to move in from January,” Joe Mutugu, chief financial officer at Amu Power, said.

The power plant is being built in Kenya’s Lamu region, a coastal area near Somalia that has been hit several times by al Shabaab Islamist militants.

Centum posted a 8.6 percent jump in net asset value (NAV) per share to 52.1 shillings ($0.5098) in its first half ended September, outperforming the Nairobi Securities Exchange’s main NSE-20 Share Index, which was down 20 percent.

“It is not exceptional but growing that much in a market where there are challenges is not a bad outcome,” Standard Investment Bank research analyst Eric Musau said.

Its shares, which are trading at a 20 percent discount to the net asset value, jumped 8 percent after the results to 44 shillings.

“We are still looking at the numbers but it certainly looks like a decent proposition,” said Musau.

Pretax profit for the six months soared 75 percent to 2.246 billion shillings ($22 million), helped by a jump in interest income from its cash deposits.

Interest rates in Kenya surged after the central bank embarked on a tightening cycle in June. Centum said it increased its allocation of cash and fixed income to 68 percent of its marketable securities portfolio from 20 percent in March.

It cut its exposure to equities to a quarter from 70 percent in March, Mworia said.

Like other frontier assets, Kenyan shares have been pummelled this year by a flight to safety by investors worried about a potential rate rise in the United States.

Centum’s interest income climbed to 1.350 billion shillings from 83 million during the period. Total income surged to 8.384 billion shillings from 1.897 billion, said Risper Mukoto, managing director of Centum Capital, a division of the firm. ($1 = 102.2000 Kenyan shillings) (Additional reporting by Duncan Miriri; editing by Edmund Blair and David Clarke)

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