Kakuzi earnings for the first half of the year grew by 11.08% as the company enjoyed lower taxes. Profit after tax for the company grew to Ksh 272.8 million up from Ksh 245.6 million for H1 2019, following the government’s directive to cut corporate tax by 5% to 25% to cushion companies against the effect of the pandemic.
Profit before tax for H1 2020 fell by 42.5% YoY to Ksh 204.1 million in the first half of 2020, from Ksh 355.1 million, following a financial provision written back in 2019. The company grew its profits from Macadamia sales.
“During the first half of the year, avocado profits are on a par with 2019, macadamia profits are greater, and our tea operations made an operating loss of KSh 11.3 million compared to a loss of KSh 1.1 million in 2019,” said Kakuzi Chairman Graham Mclean.
Losses in the tea businesses are attributed to “depressed prices”, due to high supply in the market.
Nevertheless, Kakuzi maintained avocado profits despite shocks of the pandemic, which led to the closure of restaurants, lowering demand for guacamole. While restaurants are reopening, it is unlikely that demand from the food services market will recover by the end of the year.
“The avocado market suffered a double blow during the period. Initially with the closure of the foodservice sector in Northern Europe due to the pandemic lockdowns. This was followed by successive record arrivals of fruit from Peru which flooded the market and crashed the price.”
Half-year sales for the company grew by 43.7% from Ksh 619.5 million in 2019 H1 to Ksh 889.9 million in 2020 H1. Earnings per share for the half-year were at Ksh 13.92 from Ksh 12.53 in the same period last year.
Kakuzi’s Directors do not recommend an interim dividend.