Battery distributor Eveready posts Sh303m loss

Battery distributor Eveready East Africa #ticker:EVRD nearly tripled its losses for the full-year ended September 2019, shinning a spotlight on the struggling company’s prospects.

The company booked a loss of Sh303.5 million in the period under review, which was a further fall from the Sh116.4 million reported in the full-year to September 2018.

The widening losses came in a year when sales revenue dipped, underlining growing competition in the local market that has cut demand for Eveready East Africa’s product portfolio.

The earnings were announced a day after the battery vendor issued a profit warning.

“The board wishes to inform the shareholders of the company and potential investors that the company’s financial results for the year ended September 2019 are expected to be lower that the profit for the same period in 2018,” Managing Director Margaret Odhiambo said in a notice.

Eveready attributed the loss to the de-recognition of a Sh195 million deferred tax asset that has accrued over the last decade.

The company’s sales revenue in the year ended September 2019 dipped 24 percent to Sh190.67 million from Sh251.72 million recorded in the period to September 2018 underlining the shrinking demand and stiff competition in the local market.

Eveready’s continued decline in profits saw Jackson Mutua quit as the firm’s chief executive in January 2019 and replaced by Ms Odhiambo who was the head of corporate services.

The Nakuru-based firm has been in financial distress in recent times after the fall-out with American battery maker Energizer in 2016.

The American firm had given Eveready exclusive rights to distribute its products but fell-out after the vendor accused accused Energizer of taking control over product distribution and company margins.

Eveready now focuses on the Turbo brand to grow revenue.