Atlas Mara wary of forex, economic headwinds

26th May 2016 11:57

(ShareCast News) - Atlas Mara sees its full-year profit to exceed the underlying $11.3 million booked in 2015, but warns softer African currencies and a more challenging economic backdrop provide "meaningful" headwinds to achieving this.The sub-Sahara African financial services group, whose shares were down a little more than 3%, reported a first-quarter after-tax loss of $6.7 million, from a profit of $0.5 million.In swinging to this loss, it cited the impact of the foreign exchange weakness of African currencies against the strong US dollar. Atlas also noted credit provisions taken in Zimbabwe against specific corporate loans due to economic headwinds in that market, and merger and acquisition and other one-off costs."The result for the first-quarter were broadly in line with our expectations and accorded with the indications we gave to the market at our 2015 full year earnings release," said chief executive John Vitalo in a statement."However, this level of performance is clearly below where we want to be, notwithstanding the challenges of a more difficult economic backdrop and the full impact of weaker exchange rates across our markets," he added.Vitalo noted the company's clear cost-reduction plans and revenue initiatives to ensure that the group was positioned to tackle current headwinds."We remain committed to delivering increased profitability for 2016 relative to 2015, although we expect the year to be one of uneven quarterly performance with improving profitability over the course of the year as we execute on our focused initiatives."Atlas added that it continued to target 2016's full-year results to exceed the profit of $11.3 million reported for 2015, excluding any revaluation of intangible assets or goodwill. It recognised that weaker African currencies and a more challenging economic backdrop provided "meaningful headwinds to this outcome."