Naivas posts Sh2 billion profit in nine months

Supermarket chain Naivas Limited made a profit of Sh2.1 billion in the nine months ending in March, recording higher profit growth than the previous year.

The private company’s performance was revealed by Mauritian IBL Group which acquired a 26.3 percent stake in the retailer in August last year as part of a consortium that owns 40 percent of the shares.

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“Nivas, the Kenyan supermarket chain in which the Group (IBL) invested during the first quarter, posted higher profits compared to last year,” the multinational said in a trade update.

“The profit share of Naivas, as an associate, was reported for the first time this year and represents 184 million Mauritian rupees (553.4 million Kenyan shillings at current exchange rates).”

Earnings of Sh553.4m allocated to IBL indicate that Naivas totaled Sh2.1bn in the nine-month period.

The supermarket operator, which has grown to dominate the formal retail sector, has been consistently profitable over the years.

This led to the attraction of large investors who paid a large premium to enter the list of shareholders.

Previous disclosures showed the retailer reported sales of Sh65.1 billion in the year ending June 2021 when it made a net profit of Sh2 billion, representing a net margin of 3.18 per cent.

This was an improvement over the previous year when it generated net income of Sh1 billion on sales of NIS 54 billion, a net margin of 1.9 percent.

The Peter Mokoha Kaju family — the founders of Naivas — in August last year secured $32.29 million (Sh4.4 billion) from the sale of an 8.5 percent stake to the IBL consortium in a deal that valued the retailer at NIS 45.6 billion.

The family joined forces with the International Finance Corporation (IFC), German DEG Fund and private equity firms Amethis and MCB Equity Fund to sell a combined 40 percent stake in the country’s largest supermarket for $151.97 million (Sh20.9 billion).

Other parties to the IBL-led consortium are Proparco and DEG, which have both reinvested in the supermarket chain.

Established in 1990, Naivas has grown to be the largest supermarket chain in the country with over 84 stores and employing 8,000 people as of June 2022.

Its growth came amid stumbles by rivals such as Nakumatt Holdings, Uchumi Supermarkets and Tuskys that went bankrupt due to too much debt or mismanagement.

The financial performance of the other two prominent retailers – Carrefour and Quick Mart – is not available to the public.

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Naivas has continued to expand, opening a total of seven new stores last year alone, and increasing its number of branches to 91 as of December 2022.

Branches it opened last year include Elgon View Mall in Eldoret, Naivas Nairobi West, Naivas Express Uthiru and Greenwood Mall in Meru. Supermarkets are expanding in crowded locations including middle-class residential neighborhoods.

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