Kakuzi Plc, a listed agricultural firm, has issued a profit warning for the full year ending 31st December 2024, citing lower turnover from Avocado exports coupled with supply chain disruptions resulting from tension in the Middle East.
- •The Nairobi Securities Exchange listed firm said it anticipates at least a 25% decline in net profits for the period ending 31st December 2024, compared to earnings in the same period in 2023.
- •The closure of the Red Sea Route to Kakuzi’s main European markets has forced the firm to opt for longer journeys around the Cape, resulting in spoilt fruit and lower market returns owing to their highly perishable nature.
- •According to the company, the macadamia business has recovered in the year with increased orders and doubling price levels. However, Kakuzi holds that the recovery cannot fully forfeit the losses of extended shipping times on avocados.
“We, therefore, wish to report that our net earnings for the year ending 31st December 2024 are expected to be more than 25% lower than that reported for the year ended 31st December 2023,” Nicholas Ng’ang’a said in a Notice.
“The anticipated drop in full-year earnings is mainly a result of lower turnover from Avocado exports arising from a lower crop and supply chain disruptions due to the prevailing Middle East geopolitical tensions,” Ng’ang’a added.
Profit warnings are issued to give shareholders a guide to a company’s performance in advance, especially in cases of a 25% or more decline in earnings compared to the prior year.
While companies are required to issue profit warnings at least 24 hours before publication, the Capital Markets Authority encourages an issuance as soon as the directors become aware of the anticipated drop.
Kakuzi joins WPP ScanGroup in issuing profit warnings this year, with the list narrowing compared to a year earlier.
WPP Scangroup announced a profit warning for the year ending 31st December 2024 which the board attributes to the negative impact by foreign exchange losses driven by the significant appreciation of the shilling.
Earlier, Sasini issued a profit warning for the full year ending 30th September 2024, citing higher production costs, depressed commodity prices and supply chain disruptions.
