Uchumi narrows full year loss to Sh1.7bn
Uchumi Supermarkets restructuring efforts have began bearing fruit with the retailer narrowing its full year to June loss by 39 percent.
In the latest published financials, Uchumi announced a Sh1.7 billion loss down from Sh2.8 billion a year earlier.
The retailer attributes the performance to improved cost management as it continues to streamline its operations.
Uchumi has over the last one year closed several of its branches remaining with just 20 as part of efforts to cut costs while improving the margins from sold goods.
As a result, revenues dropped to Sh2.6 billion from Sh6.4 billion in 2016, as the cost of sales narrowed from Sh5.4 billion to Sh2.13 billion.
“The board and management continued to implement initiatives aimed at recovery and turnaround in performance including streamlining operations, strengthening management and implementing improved operational processes,” Uchumi said in a statement.
Uchumi had delayed releasing its results as it moved to a new financial reporting system devoid of its Uganda and Tanzania operations which it shut down in 2015.
“the financial statements give a true and fair view of the consolidated and separate financial position of Uchumi Supermarkets as at 30th June and of its consolidated and separate financial performance and its consolidated and separate cash flows in accordance with International Financial Reporting Standards,” reads a note from its auditors.
Uchumi is banking on the injection of capital to complete the turnaround process, lifting it back to profitability.
In July, Uchumi indicated that was it talks with a strategic investor to pump in Sh3.5 billion to acquire a stake in the retailer, while the government has also committed to inject additional capital.
“Discussions are ongoing with a potential strategic investor and government shareholder loan is imminent with the expected release of Sh700 million,” Uchumi Supermarkets chief executive officer Julius Kipng’etich said.
Mr Kipng’etich said the funds will be channeled towards restocking its stores as well as securing long term deals for its 20 branches.
Uchumi also plans to use the funds to retire part of its existing debt.
Uchumi has since 2015 been relying on an elaborate turnaround strategy aimed at putting the business on a growth trajectory.
This has seen the retailer dispose non-core assets while closing under performing branches as well letting go of a number of workers.
The board did not recommend a dividend to shareholders.
For Citizen TV updates
Join @citizentvke Telegram channel
Video Of The Day: Some MPs plan to shoot down Uhuru\'s proposal on VAT