Listed agricultural firm Kapchorua tea has issued a profit alert indicating that its full-year earnings for the year ended March 2019 are expected to decline by at least 25 per cent. It becomes the eighth company at the Nairobi Securities Exchange to issue such an alert in under three months.
Kapchorua tea cited unfavorable weather patterns, increased labor costs and lower tea prices as the reasons for the anticipated decrease in profit.
In 2018, workers in the tea industry went on strike demanding for higher wages and better working conditions. The labor-action led to a drop in the level of tea production especially among big producers like Unilever tea ltd, James Finlay, Williamson tea and Sasini.
Kapchorua posted a KSh76 million net loss in its half-year results in September 2018 mainly caused by a drop in tea prices and an increase in operating expenses. Its rival company, Limuru Tea posted a KSh 2.5 million net profit in its 2018 full year results, from a loss of KSh22 million in the previous year.
