Britam center. [Photo/businesstoday.co.ke]Britam Holdings Plc has issued a profit warning for the year ending December 31, 2017, citing a one-off switch to a new methodology of accounting for liabilities.
Earnings of the company, one of the leading financial services groups in East Africa, for the period is expected to decrease by at least 25 percent compared to that reported for the same period in 2016, a statement sent to Nairobi Securities Exchange (NSE) said. “The expected decline is mainly due to a change, in 2016, of the valuation method of the long-term liabilities to Gross Premium Valuation methodology from the previously applied
Net Premium Valuation in compliance with requirements of the Insurance Act as amended by the Finance Act 2015, board Secretary, Nancy Kiruki explained. “This one-off change positively impacted the earnings in 2016 by Sh5.2 billion. Without the impact of the one-off change, the company’s performance has improved in 2017,” she said.
Kiruki disclosed that the company is on track in executing its 2016-2020 strategy on the backdrop of which, the board and the management, are optimistic that the business will continue to perform well this year.
Britam is the latest NSE-listed firm to alert shareholders that its profit is expected to decline. It is among the 15 companies listed on the bourse that has now declared a profit warning.