Sameer to get Ksh879m after land sale

The corporation, which has been carrying the land at the historical cost of merely Ksh15 million rather than the current market value, is anticipated to make a sizable profit from the transaction.
3.75 acres of undeveloped leasehold land are included among the assets held for sale. The sale began in 2022 and is anticipated to be completed by the third quarter of 2023, according to the Nairobi Securities Exchange-listed company’s most recent annual report.
“The asset held for sale is estimated to have a fair value of Ksh879,036,000,” Sameer continued.
The corporation had stated in 2021 that it was considering selling a property to help stabilize the company’s cash condition.
Sameer hasn’t sold any land in recent years, despite sitting on significant gains on investment properties it bought decades ago. Although Sameer does not specify how much freehold land it has, reports have suggested that it possesses 85 acres in Nairobi’s Embakasi neighborhood.
The market value of the Nairobi Securities Exchange-listed company was dwarfed by the fair value of the land and commercial assets that Sameer controlled in their whole as of year’s end, which was Ksh7.58 billion as opposed to Ksh8.07 billion the year before.
The value of the land and commercial buildings is 12.5 times the market capitalization of the firm, which was Ksh604 million as of Monday’s opening of trade when its share price was Ksh2.17.
The company, which is engaged in the tyre and real estate industries, has two loans expiring in 2025: a Ksh395.99 million loan from the company’s primary shareholder Sameer Investments Limited and a Ksh100 million credit from Sameer Telkom Limited.
For the fiscal year that concluded in December 2022, Sameer Africa’s net profit decreased by 54% to Ksh100 million as a result of problems in the supply of tires and higher import expenses.
The tyre company was loss-making, bringing the group’s net profit to Ksh100 million, as the property section generated a profit of Ksh186 million from Ksh159 million the year before.
The company, which had previously issued a profit warning, claimed that since it did not pass the full impact of pricing hikes to clients, the depreciation of the shilling versus the dollar had negatively impacted its margins.
In order to save costs, the business shut down its Nairobi manufacturing in 2016 and moved production to China and India. However, this did not turn out as planned, leading them to discontinue the business line in 2020 before starting again a year later. In light of supply disruptions and high import costs, the company has declared that it will reevaluate the feasibility of its tire trading operation.