Despite sustained poor performance in the power segment, Investment company TransCentury has narrowed its loss position in the first half of this year to Sh676 million.

TransCentury in a similar period last year suffered Sh1.6 billion losses, which was heavily weighed down by poor performance in its energy business.

Despite a 25 per cent year on year revenue drop in the power business, the company's turnover increased by 5 per cent to Sh5.2 billion from Sh4.9 billion in the period under review.

"This growth was attributable to the ongoing execution of major construction projects in engineering division, which commenced in Q1 (first quarter) 2015," the company said.

The power division's revenues were substantially hit by significant interruptions of production processes "in our copper factory due to the ongoing final phase of capacity and efficiency upgrades", the management added.

LOANS

In the period to June 30, finance costs soared by 29.5 per cent year-on-year to Sh497 million as a result of higher financing charges from the power division and currency depreciation on the dollar denominated loans that the firm is servicing.

"While we had anticipated some profitability in 2015, the current numbers point to us otherwise. Financing remains a key challenge for TransCentury with the company likely to make a cash call for the repayment of the outstanding 2011 bond maturing in 2016 (of approximately $80 million) - considering the 133.8 per cent redemption of the principal amount," analysts at Standard Investment Bank (SIB) said.

The firm is pegging its recovery on growth prospects in the domestic and regional markets buoyed by the ongoing implementation of ambitious projects in energy and transport. It also anticipate that the government's policy on 40 per cent local content requirement will specifically boost demand for its power products.