Foreign exchange swings have wiped millions from the reported profits of Atlas Mara during the first nine months of the year alone, the company announced today.
The financial services company, which was co-founded by Bob Diamond and is focused on banking in Africa, reported in its unaudited results for the year to September that profit before tax had fallen to $4.1m (£3.4m), down from $13.5m for the same period the year before.
While this represents a disappointing 42.5 per cent slide on a constant currency basis, it's a 69.6 per cent tumble on a reported basis.
Total income, meanwhile, had inched up to $177.1m from $154.4m.
Shareholders were sympathetic to the company's currency headaches. Shares are trading up 4.4 per cent at $3.00 at time of writing. However, this price is still roughly 40 per cent lower than what they were trading at this time last year.
Why it's important
British holidaymakers are not the only ones with exchange rate woes. Atlas Mara has been battling the effect sliding African currencies is having on its books for some time now. Although the company is optimistic it will continue moving onwards and upwards throughout the rest of 2016, it is more than painfully aware the economic environment is not in its favour.
In addition, the company, which was founded in 2013, is in its early days and is clearly living by the adage of having to spend money to make money, as the bulk of its ballooning expenses could be pinned on acquisitions.
What Atlas Mara said
John Vitalo, Atlas Mara's chief executive , said:
I am pleased with the progress we have made in reshaping the business to respond to a more challenging macroeconomic environment. Our strategy of buying, protecting and growing sub-Saharan Africa banks hasn't changed.
What has changed is how we are going about achieving our objective of becoming the region's premier financial institution. We have been emphasising cost controls, streamlining operations and growing our digital initiatives and our markets and treasury business as a key focus during quarter three and will continue this focus for the rest of the year and into 2017.
Even the best plans can go awry with a bad exchange rate