Nairobi Securities Exchange listed firm Sasini Plc is expecting net earnings for the year ended 30th September to decline by at least 25 per cent.
The company attributes the decline to high production costs, the severe drought witnessed in the first six months of the year, and lower than expected coffee prices.
- The company also cites the effects of the severe recession in world commodity markets escalated by geopolitical events and factors that affected its macadamia business.
- Macadamia and avocados contributed nearly a third of the firm’s net profit posted in 2022, which shows the potential of the two crops in lowering the contribution of coffee and tea in total revenue.
“We anticipate that our projected net earnings will be 25 per cent lower than the reported earnings for the year ended 30th September 2022,” said Board Chairman, James Boyd McFie.
Last year, Sasini closed down its dairy unit because it was draining money. Managing Director Martin Ochieng said the dairy business was too small and production costs per litre of milk were above the selling price.
“When we closed it, a litre of milk was being produced at Sh32 a litre and was selling at Sh30,” he said “We are looking at several opportunities…in new crops and general agriculture.”
The agriculture firm is currently serving several markets including Pakistan, Korea, and Japan.
In January, it announced plans to deepen its inroads in the Asian market. “We are not yet in India and China yet they have a very strongly growing middle class that can afford the products that we produce. If we open up to new markets it means we need to have enough produce to satisfy these markets,” said Ochieng.