This archive report was first published on 13 July 2020.
Shelter Afrique, a Pan African housing development financier, has made significant strides in turning around its fortunes. The company announced a Ksh59 million loss for the full year ended December 2019, down from a Ksh 923 million loss in 2018, representing a 94% drop year on year.
According to the company's Chairman, Dr. Steve Mainda, enhanced corporate governance practices, robust enterprise risk management, a new business model, and debt restructuring plans have played key roles in fast-tracking the recovery process.
Shelter Afrique Managing Director, Andrew Chimphondah, stated that the company had projected a return to financial viability by 2020 and overall financial sustainability by 2023. He attributed the return to financial stability to a significant reduction in operating loss in 2019, which he said was an indication that the turnaround strategy has been both successful and effective.
During the period under review, the company recorded a reduction in interest expense by 33% from Ksh998 million in 2018 to Ksh670 million in 2019. Total assets under management reduced by 16%, from Ksh22.9 billion in 2018 to Ksh19.3 billion in 2019, as a result of a 31% decrease in net loan assets.
The company maintained a positive liquidity position with a cash balance of Ksh5.6 billion closing the year with a liquid ratio of 29%. This was achieved on the back of enlarged share capital receipts from shareholders and successful collections from a non-performing loan book.
Shelter Afrique is optimistic of returning to full financial viability from 2020, despite the severe impacts of the COVID-19 pandemic. The company's immediate strategic ambition is to achieve Ksh100 billion plus in housing finance delivered directly and through funds mobilized and leveraged from third parties.
Published on July 13, 2020, by Business Today.
