NIC Holdings Limited, a listed company on the Uganda Securities Exchange (USE) under the leadership of Elias Edu as Managing Director, has delivered a sharp warning to its investors, announcing an expected consolidated net loss for the half-year period ended June 30, 2025.
This major reversal comes as a stark contrast to the net profit recorded in the corresponding period of 2024.
In a formal statement issued by the Company Secretary, Samuel Manankiti Iloabuchi, the Board of Directors informed shareholders and the general public of the imminent negative results in compliance with Rule 38 (3) of the Uganda Securities Exchange Listing Rules 2025.
The core message for shareholders is clear: tough times are ahead, as the financial impact of strategic changes has temporarily eroded profitability for the company.
Loss on Disposal of Investment Property
According to the statement released by Iloabuchi, the expected shift from profit to loss is attributed primarily to one key factor: a “loss incurred on disposal of investment property” while the company was implementing its asset restructuring initiatives.
This indicates that NIC Holdings, which operates over 50 branches across the country, has sold off a significant asset, likely a piece of real estate or a long-term investment, at a price below its book value.
While such a sale may be a deliberate move to streamline assets, raise liquidity, or pivot the company’s strategic focus (restructuring), the immediate financial consequence is a substantial, non-recurring loss that will wipe out operating profits.
For shareholders, this is a double-edged sword:
The Pain: The net loss directly impacts the company’s earnings per share (EPS) and future dividend potential for the year.
The Rationale: The restructuring could lay the groundwork for a leaner, more efficient company set for better future returns. However, regardless of the circumstances, the current period demands caution.
Shareholder Alert and Caution
In light of the profit warning, the Board of Directors, led by Kampala lawyer Alan Shonubi as Chairman, has issued a necessary warning to investors, stressing prudence and caution:
“Shareholders and potential investors are advised to exercise caution when dealing with the Company’s securities until the full interim results are published,” the statement concludes.
This is a critical regulatory and fiduciary duty, signalling to the market that:
The Stock Price is at Risk
The announcement of a net loss will likely trigger volatility and downward pressure on the NIC Holdings share price when the market digests the news.
Full Details Pending
Investors should wait for the full interim results to assess the scale of the loss properly, the nature of the assets disposed of, and the long-term potential of the implemented restructuring strategies.
Strategy to Improve Performance
However, despite the current setback, the Board remains optimistic about a turnaround, assuring the market that they are “actively implementing strategies to improve the Company’s performance in the second half of the year.”
The market will be keenly watching for the publication of the full interim results, which are expected to elaborate on:
The specific nature and value of the investment property disposed.
The rationale behind the asset restructuring.
The details of the performance improvement strategies intended to return the company to profitability.
But for now, investors must brace for a tough reporting period, keeping a close eye on the company’s next steps to move “From Loss to Recovery.”