@BusinessDaily

Centum's real estate portfolio lifts credit rating by SA agency

1 months ago, 7 Nov 18:17

By: Constant Munda

South Africa’s Global Credit Ratings (GCR) has affirmed Nairobi Securities Exchange (NSE)-listed Centum Investments Company Plc’s ability to timely meet financial obligations, backing the firm’s diversified portfolio across the sectors to support growth.

GCR has retained the national scale ratings assigned to Centum of A(KE) for long term borrowing and A1(KE) for short term debt.

The credit ratings, valid until July, 2019 with a positive outlook, boost the firm’s ability to mobilise funds in Kenya at favourable interest rates.

“Much of the value creation has largely been driven by (assets) growth and real estate portfolios, with two more large property ventures expected to contribute strongly to realised and fair value profits over the next few years,” GCR says in the ratings note.

“Nevertheless, the projects’ prospects are closely related to the performance in the property market, which is under some pressure.”

Centum recorded a 35.18 per cent decline in fair value gains on its real estate investments in the financial year ended last March to Sh4.18 billion from Sh6.45 billion the year before.

The decelerated capital appreciation was a reflection of Kenya’s real estate market which suffered slowed growth in sales prices last year.

Its real estate ventures include flagship mixed-use Two Rivers Development Ltd (TRDL) in Nairobi which contributed the highest share to its net asset value (NAV) at 14.76 per cent for the year ended March 2018, Pearl Marina in Uganda and Vipingo in Kilifi.

Centum is currently selling serviced and unserviced plots at its 10,254-acre Vipingo Ridge to unlock value for shareholders.

"We are confident with our stable credit rating and sound liquidity which gives us the capacity to execute on our strategy," said Centum CEO James Mworia in a statement.

"We continue to focus on restructuring our balance sheet by paying down long-term debt as it matures and leveraging on third-party capital at a project level, while improving our credit quality,” he added.

The publicly-traded investment firm plans to resume drilling of more geothermal wells in Naivasha, through its renewable energy arm Akiira Geothermal, from next month.

The geothermal wells drilling in Naivasha, which targets to generate 70 megawatts of steam, forms the first phase of a proposed 140MW-capacity geothermal plant.

“The investments in power are set to substantially change the composition of portfolio in the medium term, while projects in the education and healthcare will further add to the diversity of earnings,” GCR says.

“Positive ratings action is dependent on continued strong profitability, both from annuity type income and asset sales. Gaining critical mass in other targeted sectors would be positively viewed, as it would lessen dependence on new property developments.”


Read More


Category: business lifestyle news corporate opinion markets

Suggested

9 hours ago, 18:06
@BusinessDaily - By: Mwangi Muiruri
Nyandarua in Sh400m potato factory plan

Nyandarua County has set aside Sh400 million for construction of a potato value-addition plant at Shamata. Governor Francis Kimemia said the project will commence in January with a completion date of ...

Category: business news opinion
9 hours ago, 18:05
@BusinessDaily - By: Patrick Alushula
Lobby sees revenue loopholes in treaties

East Africa Tax and Governance Network says double taxation agreements (DTAs) between Kenya and other countries come with little disclosure and may be exposing the country to tax leakages. ...

Category: business news opinion
9 hours ago, 18:05
@BusinessDaily - By: Charles Mwaniki
Treasury back in market for Sh14bn after initial bond flop

The Treasury is back in the market with a Sh13.8 billion tap sale for this month’s bond issue, after the initial sale was undersubscribed by 28 percent. ...

Category: business news opinion
15 hours ago, 12:58
@CITIZENTV - By: Citizen Reporter
PS Boga denies reports of Ksh.3K for maize farmers, demands apology

Maize farmers will be paid Ksh.2,300 and not any other amount as reported by sections of the media, the Government has said. ...

Category: topnews news business
11 hours ago, 16:20
@BusinessDaily - By: Kiragu Kariuki
LETTERS: Goat farming can help tackle food insecurity

Frequency in drought occurrence and climate change have constrained both agricultural and livestock production sectors exposing many households to food insecurity yearly. ...

Category: business news opinion
11 hours ago, 16:20
@BusinessDaily - By: Tom Mulwa,
MULWA: Time to plan for health needs after retirement

Life after retirement comes with special health-related challenges. ...

Category: business news opinion

@BusinessDaily

Centum's real estate portfolio lifts credit rating by SA agency

1 months ago, 7 Nov 18:17

By: Constant Munda

South Africa’s Global Credit Ratings (GCR) has affirmed Nairobi Securities Exchange (NSE)-listed Centum Investments Company Plc’s ability to timely meet financial obligations, backing the firm’s diversified portfolio across the sectors to support growth.

GCR has retained the national scale ratings assigned to Centum of A(KE) for long term borrowing and A1(KE) for short term debt.

The credit ratings, valid until July, 2019 with a positive outlook, boost the firm’s ability to mobilise funds in Kenya at favourable interest rates.

“Much of the value creation has largely been driven by (assets) growth and real estate portfolios, with two more large property ventures expected to contribute strongly to realised and fair value profits over the next few years,” GCR says in the ratings note.

“Nevertheless, the projects’ prospects are closely related to the performance in the property market, which is under some pressure.”

Centum recorded a 35.18 per cent decline in fair value gains on its real estate investments in the financial year ended last March to Sh4.18 billion from Sh6.45 billion the year before.

The decelerated capital appreciation was a reflection of Kenya’s real estate market which suffered slowed growth in sales prices last year.

Its real estate ventures include flagship mixed-use Two Rivers Development Ltd (TRDL) in Nairobi which contributed the highest share to its net asset value (NAV) at 14.76 per cent for the year ended March 2018, Pearl Marina in Uganda and Vipingo in Kilifi.

Centum is currently selling serviced and unserviced plots at its 10,254-acre Vipingo Ridge to unlock value for shareholders.

"We are confident with our stable credit rating and sound liquidity which gives us the capacity to execute on our strategy," said Centum CEO James Mworia in a statement.

"We continue to focus on restructuring our balance sheet by paying down long-term debt as it matures and leveraging on third-party capital at a project level, while improving our credit quality,” he added.

The publicly-traded investment firm plans to resume drilling of more geothermal wells in Naivasha, through its renewable energy arm Akiira Geothermal, from next month.

The geothermal wells drilling in Naivasha, which targets to generate 70 megawatts of steam, forms the first phase of a proposed 140MW-capacity geothermal plant.

“The investments in power are set to substantially change the composition of portfolio in the medium term, while projects in the education and healthcare will further add to the diversity of earnings,” GCR says.

“Positive ratings action is dependent on continued strong profitability, both from annuity type income and asset sales. Gaining critical mass in other targeted sectors would be positively viewed, as it would lessen dependence on new property developments.”


Read More

Category: business lifestyle news corporate opinion markets

Suggested

9 hours ago, 18:06
@BusinessDaily - By: Mwangi Muiruri
Nyandarua in Sh400m potato factory plan

Nyandarua County has set aside Sh400 million for construction of a potato value-addition plant at Shamata. Governor Francis Kimemia said the project will commence in January with a completion date of ...

Category: business news opinion
9 hours ago, 18:05
@BusinessDaily - By: Patrick Alushula
Lobby sees revenue loopholes in treaties

East Africa Tax and Governance Network says double taxation agreements (DTAs) between Kenya and other countries come with little disclosure and may be exposing the country to tax leakages. ...

Category: business news opinion
9 hours ago, 18:05
@BusinessDaily - By: Charles Mwaniki
Treasury back in market for Sh14bn after initial bond flop

The Treasury is back in the market with a Sh13.8 billion tap sale for this month’s bond issue, after the initial sale was undersubscribed by 28 percent. ...

Category: business news opinion
15 hours ago, 12:58
@CITIZENTV - By: Citizen Reporter
PS Boga denies reports of Ksh.3K for maize farmers, demands apology

Maize farmers will be paid Ksh.2,300 and not any other amount as reported by sections of the media, the Government has said. ...

Category: topnews news business
11 hours ago, 16:20
@BusinessDaily - By: Kiragu Kariuki
LETTERS: Goat farming can help tackle food insecurity

Frequency in drought occurrence and climate change have constrained both agricultural and livestock production sectors exposing many households to food insecurity yearly. ...

Category: business news opinion
11 hours ago, 16:20
@BusinessDaily - By: Tom Mulwa,
MULWA: Time to plan for health needs after retirement

Life after retirement comes with special health-related challenges. ...

Category: business news opinion
Our App