The newest kid on the Nairobi Securities Exchange floor, Shri Krishana Overseas PLC, has reported weaker half-year earnings for the six months ended June 2025 and issued a profit warning, citing a sharp rise in borrowing costs tied to its expansion program.
- •Revenue fell 5.8% year-on-year to KSh 158.7 million, while gross margin held steady at 30.5%.
- •Operating profit slipped 13.8% to KSh 18.4 million, reflecting lower sales and cost controls.
- •Shri Krishana, a packaging solutions firm which listed on the Nairobi Securities Exchange on July 24, 2025, is building a new facility in Kisaju, Kajiado County.
The firm’s finance costs surged 53.5% to KSh 15.9 million as long-term borrowings rose to KSh 113.1 million from KSh 3.6 million a year earlier. Total borrowings stood at KSh 150.2 million, pushing the company’s debt-to-equity ratio to 2.1x.
Profit before tax plunged 76.9% to KSh 2.6 million, while net profit dropped 70.4% to KSh 2.0 million, cutting net margin to 1.3% from 4.1% in the prior year.
- •Interest cover weakened to 1.16x, highlighting the strain of higher leverage. Cash flow from operations fell 74% to KSh 2.2 million.
The board warned that full-year profits will decline by more than 25%, in line with Regulation 14.5.7 of the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023. The company attributed the pressure to higher finance costs associated with its new Kisaju plant development.
Key Metrics (H1 2025 vs H1 2024)
| Metric | H1 2025 | H1 2024 | Change YoY |
|---|---|---|---|
| Revenue | 158.65m | 168.45m | 🔴 -5.8% |
| Gross Profit | 48.36m | 51.79m | 🔴 -6.6% |
| Gross Margin | 30.5% | 30.7% | 🔴 -0.2pp |
| Operating Expenses | 29.92m | 32.59m | 🟢 -8.2% |
| Operating Profit | 18.44m | 21.40m | 🔴 -13.8% |
| Operating Margin | 11.6% | 12.7% | 🔴 -1.1pp |
| Finance Costs | 15.89m | 10.35m | 🔴 +53.5% |
| Profit Before Tax (PBT) | 2.55m | 11.05m | 🔴 -76.9% |
| Profit After Tax (PAT) | 2.03m | 6.85m | 🔴 -70.4% |
| PAT Margin | 1.3% | 4.1% | 🔴 -2.8pp |
| Interest Coverage Ratio | 1.16x | 2.07x | 🔴 Weaker |
| Total Borrowings | 150.22m | 38.25m | 🔴 +292.8% |
| Debt-to-Equity Ratio | 2.1x | 0.6x | 🔴 Higher |
| Current Ratio | 1.01x | 0.87x | 🟢 Improved |
| Cash Flow from Operations | 2.17m | 8.33m | 🔴 -74.0% |
Kisaju Expansion and Growth Plans
The company’s new plant, expected to be completed in phases by early 2026, will expand capacity from about 3,000 tonnes to 22,000 tonnes annually.
Management says civil works are scheduled to conclude by November 2025, with phase one operations starting by year-end.
The packaging and printing firm serves Kenya’s horticulture exporters, FMCG producers, and industrial clients. It views the Kisaju expansion as central to meeting rising demand for agro-export packaging, including avocados, herbs, and vegetables.
While the expansion positions the company for long-term growth, the surge in leverage and interest costs raises short-term risks. Investors will be watching execution at Kisaju, cash generation in the second half, and any refinancing or debt management steps to ease balance sheet pressure.
