Carbacid Profit Rises 12 Per Cent as Investment Gains Lift EarningsCarbacid Profit Rises 12Per Cent as InvestmentGains Lift Earnings

The Nairobi Securities Exchange-listed company reported turnover of KSh2.11 billion, up 0.6 per cent from KSh2.09 billion a year earlier. Operating profit was virtually unchanged at KSh1.35 billion, while operating cash flow fell 14.2 per cent to KSh789.8 million.

The board has maintained the final dividend at KSh2 per share, giving shareholders a total payout of KSh509.7 million. The company said the dividend is expected to be paid on or around 17 December 2026 to shareholders on record at the close of business on 27 November.

Investment gains did much of the lifting

Carbacid's audited financial statements show a KSh266.4 million gain from the revaluation of equity investments, more than double the KSh121.2 million recorded in the previous year.

The company said its holdings in shares listed on the Nairobi Securities Exchange and Dar es Salaam Stock Exchange contributed positively to the results. It recorded realised gains of KSh67 million from Nairobi-listed shares and an unrealised gain of KSh199 million from its investments in Dar es Salaam-listed shares.

An unrealised gain reflects an increase in the value of an investment that has not necessarily been converted into cash through a sale. It can lift reported profit, but it does not have the same immediate cash effect as money received from customers.

That distinction matters because Carbacid's operating cash flow declined even as net profit increased. Stronger investment valuations, rather than a sharp improvement in cash generated by the main operations, were a significant contributor to profit growth.

Core carbon dioxide business faces pricing pressure

Carbacid's principal operating business mines, processes and markets natural carbon dioxide gas. The gas is used mainly by manufacturers of soft drinks and alcoholic beverages, as well as other industrial customers.

Turnover rose only 0.6 per cent to KSh2.11 billion. Carbacid said competitive pricing and changes in the mix of products and customers limited revenue growth, despite higher sales volumes and new customers in East and Southern Africa.

The company also reported higher transport and related expenses. It said geopolitical tensions had extended shipping lead times and increased freight costs, while diesel, one of its key inputs, rose by more than 20 per cent during the review period.

Administrative expenses increased 8.4 per cent to KSh477 million. Operating profit remained at about KSh1.35 billion, showing that the higher reported net profit did not come from a material increase in operating earnings.

Shareholders to receive an unchanged dividend

The proposed KSh2 dividend per share matches the previous year's payment. The total distribution of KSh509.7 million represents a substantial cash return to shareholders.

Baloobhai Patel, Carbacid's largest shareholder, owns a 49.9 per cent stake through Aksaya Investment Holdings Limited. Based on that holding, the gross dividend due to the investment company is about KSh254.34 million.

The company has set 27 November 2026 as the record date for the dividend, with payment expected on or around 17 December. Shareholders should refer to the company's official notice for the final payment arrangements.

What the results say about the business

Carbacid's results show two different trends. Its investment portfolio helped raise the bottom line, but the main carbon dioxide operation faced a difficult pricing and cost environment. Sales volumes increased, yet the company did not translate that growth into a meaningful rise in turnover or operating profit.

The decline in operating cash flow is another figure investors should watch. Cash flow measures the money generated by day-to-day operations, while net profit can also include accounting gains and other items that do not immediately bring cash into the business.

Carbacid ended the year with cash holdings of KSh255.3 million, up from KSh118.6 million, while outstanding borrowings fell to KSh382.3 million from KSh500.6 million. The company said lower investment spending supported the increase in cash.

Its strategy to 2028 focuses on retaining customers in existing regional markets and expanding into additional markets. The coming year will test whether those efforts can lift revenue and cash generation in the core business, rather than relying on gains from share investments to support earnings.

For investors, the headline profit increase is positive, but the operating figures tell a more cautious story: the company is more profitable on paper, while its main business is growing slowly and generating less cash from operations. The company's FY2026 financial results provide the detailed figures behind that distinction.

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