UAP Holdings registered a loss of 3.4 billion shillings for the financial year that ended on December 31, 2019, according to the statements released on Wednesday.
In 2018, the company registered a loss of 518 million shillings and with the ongoing Covid-19 pandemic, the losses for 2020 are projected to be even higher than the current ones.
The large losses in UAP Holdings have been attributed to a drop in property valuation by 530 percent (the largest drop) to 3.2 billion shillings from 604 million shillings.
The continuous staggering of property valuation across Kenya, Uganda, and South Sudan saw the value of properties for UAP Holdings dropping to 16 billion shillings from 19.8 billion shillings.
The investment income for the company in 2019 dropped by 78.3 percent to come in at 634 million shillings leading to the higher recorded loss.
“There are indicators that the weakening performance of the property market in Kenya and the uncertain political environment in South Sudan will likely lead to further impairments carrying value of certain properties,” UAP said in a statement.
The real estate
The real estate sector is among the hardest hit as Covid-19 continues to sweep across the world. In Kenya, property developers have postponed their operations, and Kenyans have stopped investing in property for fear of an uncertain future.
Analysts say most investors are no longer viewing real estate as the safe haven for their savings but are increasingly looking at short-term investment vehicles such as money market funds.
Other affected sectors
Covid-19 has also affected such sectors as hotels, tourism, aviation, and general transport, bars, and clubs.
Stats indicate that at least 130,000 Kenyans have lost their jobs in a period of three months since the first case was announced in Kenya.
Almost all major hotels have shut down sending home thousands of employees. All airlines in Kenya including Kenya Airways have grounded their operations with few cargo flights still ongoing.
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