Tyre and allied products retailer Sameer Africa has registered a Ksh. 182.8 million loss in the first half of the year up from Ksh. 11.58 million registered in a similar period last year.
According to a news report by the Business Daily, the publicly traded tyre distributor has attributed the loss incurred to stock outs and an influx of counterfeit products in the country. The company’s best-selling tyre sizes for instance remained out of stock in the first six months of the year fueling the stock outage that was also experienced in 2018.
“The group continues to focus on stabilising the supply pipeline to achieve optimal stocking levels,” the Nairobi Securities Exchange-listed firm said according to the Business Daily.
The company’s decision to close its manufacturing factories in 2017 in favour of imports has similarly affected the firm’s earnings in the period under review. Sameer shut down its Yana tyre manufacturing factory in August 2016 citing a tough business environment largely due to an influx of cheap imports from China and India amid rising production costs.
The Group’s revenue in the period under review similarly fell by 20 per cent to Ksh. 930.2 million from Ksh. 1.16 billion garnered in a similar period last year while operating expenses fell to Ksh. 339 million from Ksh. 353 million spent in the first six months of 2018. The reduction in operating expenses has been attributed to the firm’s cost cutting measure which saw it lay off approximately 120 staff at the end of last year to set its employee headcount at 168 employees at the start of 2019.
The tyre distributor’s finance costs in the period under review however increased by 40 percent to Ksh 42.5 million, signaling increased expenses on servicing debt.