NAIROBI, KENYA, MAY 18 — Investment firm Cytonn has more than doubled its net earnings for the year ended December 31 recording a net profit of Ksh398 million, sustained by transactions income amid a tough business environment in Kenya.
The firm’s profitability grew by 276.7 per cent from Ksh105.7 million it recorded in 2016.
Cytonn Investments Management Plc has attributed the performance to strong revenue growth arising from projects construction progress and the realization of gains from investments in the stock market.
Balance sheet growth was also robust with total assets growing by 49.4 per cent to Ksh17.7 billion from Ksh11.8 billion in December 2016.
The growth in total assets was driven by strong growth in the real estate projects under its mandate, with investment property growing by 20.8 per cent to Ksh10.8billion in 2017 from Ksh 8.9 billion in 2016.
Investments in financial services through the firm’s quoted Private Equity Investments, which delivered Ksh342.1 million to the firm in revenue in 2017 was also a major contributor to the company’s assets.
This was further complimented by growth in real estate sales and product uptake.
According to management, the financial year 2017 was characterized by a tough economic environment for businesses in Kenya, brought about by low credit growth to the private sector, which hit a low of 2.4 per cent in 2017 and the prolonged electioneering period.
“With our commitment to deliver attractive returns to all stakeholders, we saw this as an opportunity to invest in our growth while the rest of the market was distracted and businesses were on a slow,” said Cytonn’s Chief Executive Officer Edwin Dande.
In real estate, the firm’s main business area, the total value of projects grew to Ksh82 billion across 10 investment ready projects.
Two of the firm’s projects broke ground in the year 2017, namely Taraji Heights, a mixed-use development that sits on a 2.8-acre piece of land in Ruaka valued at Ksh2.5 billion and The Ridge, a comprehensive mixed-use development worth Ksh12 billion, which sits on a 10-acre parcel of land in Ridgeways.
In the same year, Cytonn launched real estate projects in the market worth Ksh35 billion.
These were RiverRun Estates, a master-planned mixed-use development in Ruiru and the Cytonn Towers in Kilimani.
“We continue with the development and construction of the rest of the projects, among them being The Alma in Ruaka” said Elizabeth N. Nkukuu, Cytonn’s Chief Investment Officer.
Revenue from sale of real estate developments increased by 92.7 per cent to Ksh612.6 million from Ksh317.9 million reported in the prior year.
“This was as a result of increased uptake in our real estate developments and speedy construction progress,” acting Financial Controller Alex Magu noted.
The firm’s Investment Property in real estate projects and investments in quoted stocks held until the end of the year had fair value gains increase by 60.6 per cent to Ksh886.0 million from Ksh551.6 million the previous year.
Cytonn’s chairman Daniel Mugendi said: “We continued to build a strong track record led by a prudent business strategy and a strong corporate governance structure, the Group has remained on course with its strategy of providing financial solutions with above average returns.”