BOC Kenya has issued a profit warning for the financial year ending December 2019 meaning the company expects its profits to be lower than 25 percent.
In a statement published on local dailies, the company has attributed the expected dip in profits to depressed demand for gases from the industrial sector, mostly Small and Medium Enterprises, due to the prevailing economic environment.
“The Board of Directors of the company projects that the company’s net earnings for the current financial year ending on 31st December 2019 may be at least 25 percent lower than the level of earnings in the previous financial year, 2018,” said BOC in a statement.
The company also said that its business has been affected by supply to several public sector customers who have remained without paying with the invoices sent to them.
“These overdue amounts have also led to additional doubtful debt provisions,” the company added.
Expect more profit warnings
Economic analysts say Kenyans should expect more profit warnings from different companies due to the prevailing economic situation in Kenya.
Companies in Kenya are complaining of the high cost of doing business coupled with high costs of power as well as low purchasing power among Kenyans.
Most companies have opted to fire their employees in an effort to cut down on their spending with most affected sectors being banking, media, and the agricultural sector.
“Kenyans should expect more profit warnings. Things are not well on the ground. The economy is ailing and soon, the results will be loud than we can imagine,” said Mr. Henry Wangila, a teacher and an economic analyst.
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We Can’t Eat GDP
The government has been bragging about the country doing well in terms of GDP but they forget one thing: we cannot eat GDP. We cannot stay on GDP. At the end of the day, Kenyans want food, houses, jobs, and real development. GDP is rhetoric.