Kakuzi Plc, a Kenya-based agro-allied company linked to Kenyan media mogul John Kimani, has warned investors that it expects profit at the end of its 2021 financial period to be at least 25-percent lower than what was reported in 2020.
The earnings guidance issued by the company to investors was triggered by trading information, market forecasts and the preliminary unaudited full-year financial results, among other data sources, currently at the board’s disposal.
Kakuzi is a leading agro-allied listed on the Nairobi Stock Exchange engagef in the cultivation, processing and marketing of avocados, blueberries, macadamia, tea, livestock and commercial forestry.
Kenyan media mogul John Kimani, who holds a governance role in Kakuzi, is the firm’s largest shareholder with a 32.3-percent stake, amounting to 6,330,699 shares.
Nicholas Ng’ang’a, chairman of Kakuzi, said the firm’s performance was impacted by an 18-percent decline in the production of Hass Avocado, its main operation, coupled with a fall in the price of the commodity on the global market due to oversupply in Peru and Columbia.
As a result, “net earnings for the year ended 31st December 2021 will potentially be at least 25-percent lower than that reported for the year ended 31st December 2020,” Ng’ang’a said in his statement.
The company also revealed that its earnings in 2021 were partly offset by the robust performance that it reported from other crops, especially in its macadamia business, which recorded impressive growth during the year.
The growth in this business segment reflects the importance of the investments that it made under its revenue diversification strategies to mitigate global market volatility and an over-reliance on any single product.
In the first six months of 2021, Kakuzi reported a 28.7-percent decline in its after-tax profit from Ksh272.79 million ($2.41 million) in the same period of 2020 to Ksh194.64 million ($1.72 million) in 2021.
Meanwhile, its revenue declined marginally from Ksh889.9 million ($7.87 million) to Ksh888.95 million ($7.86 million)
As of press time, Jan. 6, shares in Kakuzi were trading at Ksh420 ($3.71) unchanged from their opening price on the bourse this morning.
At this price, the market value of Kimani’s 32.3-percent stake in the leading agro-allied firm is valued at Ksh2.66 billion ($23.5 million).
