INFRASTRUCTURE investment company TransCentury said yesterday it will take longer than a year to recover from its 15.1 per cent drop in profitability in 2013.
The publicly traded company warned yesterday that its net earnings this year will further fall by at least 25 per cent.
The company's net profit slowed to Sh626 million for the year ended December 2013 from Sh741million a year before, it reported on Tuesday.
The nose-diving performance has been blamed on its investment in Mombasa-Kampala railway line concessionaire Rift Valley Railways.
It said the delayed turnaround of RVR resulted in its failure to meet targeted returns in consortium.
This led to the March 31 sale of its entire 34 per cent stake in the RVR for Sh3.8 billion ($43.7 million) to Egypt's investment firm Citadel Capital- the now majority owner in RVR with 85 per cent holding-after three months of private negotiations.
TransCentury said in a cautionary note to investors yesterday that returns from its seven-year investment in the RVR "were below the historical fair value".
Cash recouped through the sale would be pumped into "higher return investment opportunities that will improve both the financial position and future profitability of the Group", the statement added.
The Nairobi Securities Exchange's listed firm has nonetheless backed power and engineering divisions to remain profitable this year.
Its shareholders would receive the same dividend payout they received last year of Sh0.40 per share if they approve the board's proposal at the forthcoming annual general meeting.
Earnings per share dropped 36.14 per cent in 2013 to Sh1.06 from Sh1.66 a year earlier.
TransCentury shares were the biggest losers at the close of trade yesterday at the NSE, selling 8.33 per cent lower day on day at Sh24.75.