Liberty fourth NSE-listed firm to issue a profit warning
Regional insurance firm Liberty Kenya has issued a profit warning, becoming the fourth Nairobi Securities Exchange (NSE) – listed firm to do so this year.
The insurer has attributed the expected dip in its earnings to the significantly higher risk claims paid out in 2021, said notice by Board Chairman P. Odera.
Other listed firms that have issued profit warnings on expected shave on 2021 earnings are fruit exporter Kakuzi, Limuru Tea, and insurer Sanlam.
In a note to the public, Sanlam said continued battering by the COVID-19 pandemic has affected both corporate and retail segments of its businesses.
“Our projected net earnings after tax for the period ended December 2021 will reflect a decline compared to the prior-year earnings,” Sanlam said mid this month.
“In response to the uncertainty, the business increased the level of premium debt provisioning to reflect the associated default risk while claims and related policyholder reserving was increased to ensure sufficient prudence,” the insurer added.
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According to Insurance Regulatory Authority statistics for the nine months ending September 2021, Sanlam Insurance suffered an underwriting loss of Kes188.77 million.
The insurer’s net claims surged closing at Kes142,09 million, while its market share stood at 2 percent and claims ratio settled at 92 percent.
In early January, agricultural firm Kakuzi issued a profit warning for the year ended December, citing reduced avocado output and lower prices of the fruit in European destination markets.
In 2020, Kakuzi made a net income of Kes622 million the year before, indicating that it anticipates its net earnings to fall by at least 25 percent to Kes466.5 million in the period under review.
“This profit warning notice arises from trading information, market forecasts, and the preliminary unaudited full-year financial results, among other data sources currently at the board’s disposal,” Kakuzi said.
