This archive report was first published on 13 July 2020.
Shelter Afrique, a Pan African housing development financier, has made a remarkable comeback in 2019, according to its latest earnings report. The company's operating loss reduced to KSh 59 million (USD 0.59M) in 2019, down from KSh 923 million (US$9.23M) in 2018, representing a 94% drop year-on-year.
Addressing the press in Nairobi, Shelter Afrique Chairman Dr. Steve Mainda attributed the company's turnaround to enhanced corporate governance practices, a strong and diverse board, robust enterprise risk management, a new business model, and debt restructuring plans.
Shelter Afrique Managing Director Andrew Chimphondah said the company had projected a return to financial viability by 2020 and overall financial sustainability by 2023. He noted that the return to financial stability, as indicated by a significant reduction in the company's operating loss in 2019, was an indication that the turnaround strategy had been both successful and effective.
During the period under review, the company maintained a strong liquidity position with a cash balance of KSh5.6 billion (US$56.97M) and a liquid ratio of 29%, 14 percentage points above the 15% minimum policy limit.
Shelter Afrique also recorded a significant reduction in interest expense by 33% from KSh998 million (US$9.98M) in 2018 to KSh670 million (US$6.70 M) in 2019 on the back of a 39% decrease in borrowings from KSh11.67 billion (US$116.77 M) in 2018 to KSh7.16 billion (US$71.66 M) in 2019.
The company's Chief Executive, Andrew Chimphondah, expressed optimism that Shelter Afrique would return to full financial viability from 2020, despite the severe impacts of the COVID-19 pandemic. He outlined six key focus areas post-pandemic, including capital raising, business continuity, cost realignment, strategic repositioning, refinement of the business model, and digital transformation.
