This archive report was first published on 15 May 2020.
On May 15, 2020, Sameer Africa, a Nairobi Securities Exchange-listed firm, announced that it would be shifting its focus to real estate after closing its tyre distribution unit.
The company had been struggling with losses in the tyre business, despite efforts to cut costs, including outsourcing production to India and China.
Sameer's current property investments include land holdings and stakes in Sameer Business Park (25 percent) and Sameer Industrial Park (100 percent), which lease space to tenants.
Although the closure of the tyre business will result in a loss of revenues amounting to Sh1.49 billion, Sameer's profitability is expected to rise due to the elimination of losses in the tyre division.
According to the company, its full-year profit projection in 2021 is forecast at Sh185 million, against a forecast of Sh69 million this financial year 2020.
Sameer reported net losses of Sh529.3 million in the year ended December 2018 and Sh182.7 million in the half-year ended in June 2019.
The company will spend Sh223 million to close the tyre business, comprising Sh60 million in retrenchment costs and Sh163 million on writing off fixed assets.
Shutting the unit will see 73 employees lose their jobs at the end of this month.
