Two listed companies, Crown Paints Kenya PLC and WPP Scangroup, have issued profit warnings for the financial year ending 31st December 2023.
Crown Paints, a leading paint manufacturer, expects its full-year earnings to drop by more than 25% compared to the previous year.
The company attributed the decline to “The increased cost of raw materials, increase in transportation costs, volatility in foreign exchange rates and the slowdown in economic activities during the year.
WPP Scangroup, a marketing and communication group, expects its full-year earnings to be lower than the previous year as well. The group said that the subdued economic environment led to cautious spending by its clients, resulting in lower revenue from its advertising, public relations, and digital businesses.
The group also incurred a one-off severance cost of KES 178M as part of its restructuring program to streamline its operations and reduce its fixed costs.
Crown Paints and WPP Scangroup in separate notices said they remain optimistic about the prospects of their respective sectors.
“Directors continue to optimize and transform the business operations to deliver future competitiveness and value,” said WPP Scangroup.
“Whilst the challenging market conditions persist, the Board remains optimistic that, despite macro-economic challenges, the Group’s performance will improve in 2024 given the diversity of our businesses both in Kenya and across the region,” said Crown Paints.
Other companies that have issued profit warnings for the fiscal year include Kenya Airways, Everready, Nation Media Group, Sasini, KPLC, Centum, Unga Group, Longhorn Publisher, and Car & General.
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