CMC H113 Profits Fall On Low Demand
News: Kenya-based CMC Holdings, the exclusive distributor of Ford Motor in the country, registered a 59% year-on-year (y-o-y) decline in pre-tax profit during H1FY13, owing to low demand before the presidential elections in early March. The company's profit dropped to KES221mn (US$2.6mn) in the six months ended March 31. According to the company's statement, high interest rates and elections in the country confined the company's growth during the period. However, CMC expects a better performance in H2FY13 due to declining interest rates in the market.
BMI View: Passenger car sales in Kenya in 2012 were weak, largely because of high interest rates, as most vehicles are bought on credit in the country. New vehicle sales in Kenya rose 1.4% year-on-year (y-o-y) to 12,798 units, according to data from the Kenya Motor Industry Association (KMIA), which was the slowest growth since 2009 when reduced economic activity cut purchases 20%.