Nairobi Securities Exchange listed agricultural firm, Kakuzi Limited has reported a Pre Tax loss of Ksh 51.6 Million for the period ended June 2016 compared to a restated profit of Ksh 3.6 million posted in the same period year ago. The company blames the disappointing result on lower tea prices, lower livestock sales and the delay of macadamia sales due to awaiting completion of the cracking facility construction.
The company also restated its Half Year 2015 pre tax profits of Ksh 63.8 million to Ksh 3.5 million arguing that it had not fully adopted the amendments to the International Accounting Standard (IAS) 41.
“Agriculture and our permanent plantings are now classified under IAS 16 – property, plant and equipment as bearer plants to be depreciated over their expected useful life” Kakuzi
Sales increased to Ksh 437.3 million versus Ksh 420.2 million posted in June a year ago.
Prices of Tea are up by 37% up over last year but Kakuzi says this has had a negative impact on prices where they now operate below cost of production levels.
“The avocado factory throughput to date is 760,116 cartons, 18% up on the equivalent position last year made up of our own and smallholder crop. There has been downward pressure on prices due to large deliveries to Europe from Peru and South Africa and logistics on shipping in particular to Southern France have been problematical. Our macadamia harvest has been up to budget levels and we are storing our nut in shell at our new storage facility awaiting completion of the factory, which began operations at the end of July. Prices are similar to last year at present. Livestock sales continue to be a challenge to attract good quality beef market prices. Forestry operations continue with positive development and demand. Our joint project operation produced a positive cash position.” Kakuzi said in a statement.
The directors did not recommend the payment of an interim dividend.
Early trading on Wednesday morning, Kakuzi Ltd was trading at Ksh 301 per share, this is 7.12% above its 1 Year low of Ksh 281 posted in Q3 of 2015. (See Chart)