Thursday, February 22, 2024

Coronavirus dims Afinitas prospects

The country’s top international venture capitalist, Afinitas, last year reduced its losses following strong performance in the group’s subsidiaries. The strong growth which was expected to spill over to this year has been halted by the coronavirus pandemic, which is set to reverse the company’s efforts to break even. 

According to Afinitas financials for the year ended December 2019, revenue increased across its core businesses, up by 72 percent to P13.9 million. The surge in revenue growth was against a rise in expenses, leading to an P8.4 million loss, which was better compared to 2018’s P13 million loss. 

The improved performance was heralded by the venture capitalist’s improved performance in the first half of 2019, reporting a 64 percent increase in revenue in the first half of the year, raking in P12.2 million for the six months ended June 2019. However, the income was eroded by expenses which spiked by 11 percent to P14.7 million, leaving the company with a loss of P1.7 million.

The pan African investment holding company focused on developing a portfolio of African focused businesses is yet to make a profit since it was listed on the Botswana Stock Exchange in 2015 under the domestic venture capital counter. 

After raising money through the listing, Afinitas acquired a 50 percent shareholding in Africa Events Limited which entirely owns the rights to Africa Financial Services Investment Conference (AFSIC). In 2016, Afinitas followed with establishment of two new companies, Ethiopia Investments Limited and Adventis Limited, committing P50 million to the two ventures.

Afinitas says the growth in 2019 was pleasing, with management focused on ensuring that growth continues this year. The company revealed that AFSIC 2019 showed strong growth in delegate numbers and revenue, with AFSIC 2020 tipped to be a record year from an attendance and revenue perspective. However, the onslaught of the coronavirus on the global markets has pushed Afinitas to postpone its top money-making event that brings top investment experts every year in London, where Africa trade and investments are discussed. 

Afinitas added that the postponement of the event will adversely affect the company’s financial performance in 2020, estimating the postponement to supress group’s result by P2.4 million, thus leading to a higher loss projected for the year.

“AFSIC 2020 was showing strong year on year growth again as it develops into one of the most important conduits of investment into Africa, and we were expecting to be able to report strong group income growth again in 2021 and a continued drive towards profitability at the group level,” wrote company chairman Lesang Magang and managing director Rupert McCammon in a commentary that accompanied the new results.


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