UAP Holdings, a Kenya-based financial services firm, expects to post a marked improvement in performance in 2019 following a tumulous 2018.
The institution posted a drop in after-tax profit of over 60% for the half year to Ksh190.86 million ($1.88 million) from Ksh496.79 million ($4.88 million) in 2017 attributed to a one-off retrenchment cost and a deferred tax obligation.
During the year, UAP’s management proactively carried out a staff reorganisation drive. The group stated that the move was aimed at unlocking efficiencies in the business.
“The lower profit after tax in 2018 is partly driven by the related one-off redundancy cost,” UAP said in a statement.
The company sacked 89 of its employees in the first six months of 2018. The move cost UAP Ksh335.12 million.
Earlier this month, UAP Holdings issued a profit warning for the full financial year ended December 2018 citing lower asset valuations and one-off retrenchment costs.
The company expects to post net earnings for the year ending December 2018 at least 25% lower than what it reported last year.
Nonetheless, higher investment returns increased UAP Holdings’ 2017 net earnings 46.49% to Ksh1.2 billion ($11.8 million), helping to offset a marginal drop in gross written premiums. The financial services group recorded a Ksh826 million ($8.1 million) after-tax profit in 2016.
“The board is confident that the initiatives by management to grow the business while containing costs will support improved performance by the company in 2019,” UAP concluded.