Agricultural firm Kakuzi PLC posted a decline in profit before tax for the period to June 2020 to KSh 204.1 million compared to a profit of Ksh 355.1 million for the same period last year.
The firm’s net earnings for the period to 30 June 2020 was Ksh 272.8 million compared to Ksh 245.5 million for the same period last year due to the release of a deferred tax provision in view of the reduction of the Corporate tax rate to 25 percent from 30 percent by the Government.
“During the first half of the year, avocado profits are on a par with 2019, macadamia profits are greater, and our tea operations made an operating loss of KSh 11.3 million compared to a loss of KSh 1.1 million in 2019,” said Kakuzi Chairman Graham Mclean.
“The avocado market suffered a double blow during the period. Initially with the closure of the foodservice sector in Northern Europe due to the pandemic lockdowns. This was followed by successive record arrivals of fruit from Peru which flooded the market and crashed the price.”
The firm reported that the tea market experienced depressed prices due to record volumes of production in Kenya.
Treated wood product sales remained within expectations during the period.
Going forward, “Current pandemic makes projections for the year even more complicated than usual. We believe that consumer preferences for healthy food and nut-based diets will continue to increase however, we do expect that the medium-term impact of COVID-19 will increase market and price volatility,” said Mclean.
“The continued decline of tea prices remains a concern given record production levels in Kenya.”
Kakuzi’s Directors do not recommend an interim dividend.
Kakuzi Plc is a dually listed company trading on both the Nairobi and the London Stock Exchange. It engages in the cultivation, manufacture, and marketing of tea, growing, and marketing of avocados, livestock farming, growing of macadamia and forestry development.
