Atlas Mara, the African finance company co-founded by former Barclays Plc boss Bob Diamond, posted a loss for the first quarter and said its full-year profit target faced “meaningful” challenges.
The firm, incorporated in the British Virgin Islands and traded in London, reported a loss of $2 million for the three months ending March 31 excluding one-off items and costs tied to mergers and acquisitions, compared with a profit of $9 million for the same period last year, according to a statement. Atlas Mara lost $6.7 million excluding those adjustments, compared with a profit of about $500 000 a year ago, the company said.
Atlas Mara, set up by Diamond to buy African banks as part of his wager on the continent, is dealing with the impact of weaker demand from China and a slump in commodity prices that have damped the outlook for economic growth in most African countries and weighed on currencies in the region. Foreign exchange movements helped cause the quarterly loss, along with higher provisions for souring corporate loans in Zimbabwe, the firm said.
“This level of performance is clearly below where we want to be, notwithstanding the challenges of a more difficult economic backdrop,” chief executive officer John Vitalo said in the statement.
While Atlas Mara continues to target a full-year result that exceeds 2015’s profit of $11.3 million, that goal is facing “meaningful headwinds” of weaker African currencies and a “more challenging economic backdrop,” according to the statement.
The firm didn’t provide any update on its potential bid for Barclays’s controlling stake in its Africa business. Diamond said last month that he investors including US private-equity giant Carlyle Group are working together on a possible deal.
© 2016 Bloomberg