Car&General(K) Limited, a listed automotive firm, has posted a 308.8% rise in half–year 2026 earnings, the strong profitability driven by performance of its Watu subsidiary, firm motorcycle volumes and lower finance costs.
The firm has been a subject of speculative activity at the Nairobi Securities Exchange(NSE) since the launch of its electric scooter motorbike.
Car& General saw its revenues jump 30% to KSh15.64Bn, pushing up its Gross Profit to KSh2.96Bn, a growth of 39.5%
The firm’s EBITDA rose 131.8% to KSh3.56Bn, while pre-tax profit was up 281.5% to KSh2.88Bn +281.5%
Earnings per Share(EPS) for Car& General, an indicator of its profitability rose 306.26% to KSh 32.26.
Shareholders of Car& General will receive an interim dividend of KSh 1.00, an increase of 233.3%. This is, however, being viewed as underwhelming given the firm’s increase in profit and sales figures.
What drove Car& General numbers?
Watu was the biggest earnings catalyst. Car & General’s share of profit from its associate firm jumped 382.3% to KSh2.04Bn, supported by strong mobile-phone financing growth across Africa.
The core business also strengthened. Motorcycle sales averaged 12,000 units monthly, up from 7,000, while sales increased 40% in Kenya, 35% in Uganda and 22% in Tanzania.
Margins and financing improved. Gross profit grew faster than revenue, while finance costs fell 21.7% to KSh573.7million, supporting the sharp rise in pre-tax numbers.
Cash generation improved materially with Operating cash flow more than doubling to KSh1.97 billion, an increase of 118.5%, while cash balances increased to KSh674.5 million.
While Car& General has posted a very strong H1 performance, the key question remains earnings quality and sustainability.
The exceptional Watu contribution explains a significant portion of the earnings acceleration. Encouragingly, the underlying operating business is also improving, supported by stronger motorcycle volumes, better margins and lower financing costs.
Watchers are still asking whether Watu subsidiary sustain its contribution, and whether the core business can maintain its growth momentum.
Over the past few days, the Car& General counter at the Nairobi Securities Exchange(NSE) has seen some crazy buys by investors. This activity has been prompted by the firm’s improved fundamentals and diversified income streams.
The counter is also illiquid and therefore witnesses frequent volatile trading activity.
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