Cadiz Holdings, the JSE-listed financial services firm, on Wednesday said it is likely to post a weak set of profit numbers in the six months to September this year.

It said basic earnings and headline earnings a share for the period under review are expected to be over 20 percent lesser than the previous comparable last year. South African companies use headline earnings to measure the profitability of the company.

Losses of Cadiz Asset Management, a division of Cadiz Holdings, would be greater than the R2.1 million ($187,593) compared to the previous reporting period.

“Although the turnaround in the asset management business is taking longer than expected to bear fruit, the group remains committed to its investment philosophy and process which management believes is in the best long-term interests of clients,” Cadiz Holdings said, adding this was boosted by its balance sheet.

As a result of the on-going losses, Cadiz Holdings will be impairing R226.9 million ($20.2 million) goodwill in Cadiz Asset Management by about R120 million ($10.7 million).

It said the profit from Investments, another division, will be lower than the R10.4 million ($929,032) profit for the prior period on the losses from exposure to African Bank Investments Limited (ABIL) and a reduction in the value of Cadiz’ investment in Makana Investment Corporation (MIC).

In September, the South African Reserve Bank (Sarb) launched a probe into the failed provider of unsecured loans, the African Bank Investments Limited (Abil), to determine if it engaged in reckless conduct or questionable management practices.

Abil was rescued in a $1.6 billion bailout led by Sarb last month after the unsecured lender was hit by waves of bad debt. It was then decided that a consortium involving major banks would inject R10 billion ($893 million) into Abil.