Agricultural firm Sasini Tea and Coffee, has issued a profit warning for the fiscal year ending September 30, 2024.
The Nairobi Securities Exchange-listed firm anticipates a 25% decline in net profits compared to the previous year due to elevated production costs, depressed commodity prices, and supply chain disruptions.
Contributing factors include challenges with the perishable nature of the fruit business stemming from disrupted logistics to European markets following the closure of the Suez Canal.
Additionally, decreased demand for nuts in key markets, particularly the United States, due to a perceived global economic recession, has negatively impacted the company’s performance.
Board Chairman James Boyd McFie stated in a public notice, “Based on our current forecast and available information, we anticipate a 25% reduction in net earnings for the fiscal year ending September 30, 2024, compared to the previous year.”
In the first half of 2024, Sasini reported a loss after tax of KSh 37.7 million, primarily attributed to a 54% increase in the cost of sales.
The company has significantly reduced its workforce since 2020, citing increased mechanization and the need to lower payroll costs.
Sasini’s tea is grown by a subsidiary, Kipkebe Limited, which operates two major CTC factories (Kipkebe and Keritor) serving four estates and outgrowers in Western Kenya, with a combined production capacity of over 10 million kilograms of tea annually.
