Unga Group Plc says its net earnings for the year ended 30 June 2021 rose 4.4 times to Ksh 293.5 million from Ksh 66.2 million compared to the prior year.
The profit was bolstered by tax refunds and receipt of payments from the government for maize supplies in 2017.
“The interest element of the debt remains outstanding. The long outstanding tax refunds were also received during the year ending a protracted litigation process. Both receipts improved profit for the year,” the company disclosed in its audited financial results on Wednesday.
However, it said its “Overall operating profit was impacted by reduced margins, re-organisation and finance costs. Compared to the prior year, interest expense reduced because of re-structuring of banking facilities.”
The group expects its short-term performance to remain subdued owing to prevailing high raw material costs.
Fortunately, it expects its recent joint ventures to set the firm on a growth trajectory. It expects KSh284.5 million from the sale of its bakery business and part of its stakes in its animal feed subsidiaries.
“The new joint ventures and continued operational re-organization will set the company in a growth trajectory. More value-add partnership opportunities will be pursued while advancing automation opportunities in the base business,” Unga says.
Unga did not declare a dividend.
“The ongoing initiatives will require substantial cash investments. There is, therefore, a need to ensure that the existing businesses maintain healthy liquidity levels in the current tough economic conditions,” it disclosed to shareholders.