Kakuzi Plc, a listed agro business firm, saw its half year net profit tumble to KSh 171.1 million at the end of the first six months of 2023 compared to KSh 341.3 million in HY 2022.
According to the firm’s Board of Directors, the firm’s financial performance was hit by a glut in the global macadamia market, leading to a loss of KSh 329 million in the macadamia business.
The firm is eyeing recovery in the domestic macadamia market retail sales to mitigate the glut in international markets.
Kakuzi is a leading macadamia exporter in Kenya
“The global macadamia glut continues to affect all leading international exporters from Kenya, Australia and South Africa. To mitigate the losses, we have adopted a local marketing strategy geared at availing value added Macadamia products, including ready-to-eat nuts, macadamia flour and cold-pressed oil,” said Kakuzi Plc Managing Director Chris Flowers.
He said that while the macadamia business slowed, Kakuzi’s Avocado sales accelerated, with exports to Europe and China peaking. Further avocado business growth is expected in the year’s second half as exports to Malaysia and India begin to dispatch.
Kakuzi half year pre-tax profit dropped 65% to KSh 171.1 Million from KSh 494.7 Million in HY 2022.
In 2022, Kakuzi raked in a half year profit of KSh 330 Million from the macadamia business. This year, the situation has reversed to a loss of KSh (329) million.
The Board said macadamia nut kernels are now selling for less than half the price recorded during the same period in 2022 even as production volumes from all source markets continue to grow.
The global macadamia glut situation is expected to persist throughout the balance of 2023 financial year and perhaps into 2024.
Across its product lines, Kakuzi has expressed confidence in its Blueberry venture prospects.
“Although our blueberry volumes are still significantly low vis-a-vis the Avocado and Macadamia outputs, the revenue stream remains firmly within the business plans and inspires further investments. Further afield, the performance of the tea, forestry, livestock, and arable land operations continue to play their important role in our crop portfolio,” said Nicholas Ng’ang’a, the firm’s Board Chairman.
Kakuzi PLC is a listed firm on both the Nairobi Securities Exchange and London Stock Exchange engaging in the cultivation, processing and marketing of avocados, blueberries, macadamia, tea, livestock and commercial forestry.
ALSO READ: Kakuzi Plc Posts a Net Profit of KES 845.8 Million in 2022
