Newly listed Shri Krishana Overseas PLC closed its first full year on the Nairobi Securities Exchange with a sharply diminished bottom line, as the combined weight of debt-funded expansion costs and a tax-policy-driven margin squeeze erased most of the gains built in 2024.
- •The corrugated packaging manufacturer posted a profit of KSh 4.14 Mn for the year ended 31 December 2025, a 59.3% decline from KSh 10.18 Mn in the prior year - a steeper fall than the over-25% decline the company had flagged in its profit warning issued just two months after its July 2025 listing debut.
- •Revenue grew 13.3% to KSh 351.09 Mn, an encouraging top-line result that masked a difficult operating year.
- •The gains were heavily back-loaded, with the bulk of growth coming in Q4 2025 following new equipment commissioning at the company's Industrial Area plant, after H1 revenue fell 5.8% year-on-year to KSh 158.70 Mn.
Gross profit fell 10.2% to KSh 87.82 Mn as cost of sales outpaced revenue, rising 24.1% to KSh 263.27 Mn. Management attributed the squeeze to changes in tax policy that raised input costs, compressing gross margin to 25.0% from 31.6% in 2024. Operating profit collapsed 42.9% to KSh 23.15 Mn, further pressured by the overhead costs of being a listed entity including audit, compliance, and additional headcount hired ahead of expanded capacity.
Finance costs of KSh 14.83 Mn remained elevated as total borrowings nearly doubled to KSh 162.37 Mn, driven by the long-term SBM Bank facility financing the company's new manufacturing plant in Kisaju, Kajiado County. Net debt stood at KSh 155.15 Mn at year-end, pushing the net debt-to-equity ratio to 2.12x and leaving interest coverage at a thin 1.57x - below the 2.0x threshold widely regarded as a floor for comfortable debt servicing.
The Kisaju plant, central to SKL's growth strategy, is running behind schedule. Initially expected to commence phase one operations by end-2025 and reach full production in Q1 2026, commissioning has been pushed to Q3 2026. Capital work in progress stood at KSh 131.90 Mn at year-end, with the project continuing to consume capital without yet generating revenue.
The balance sheet expanded significantly, with total assets rising to KSh 457.95 Mn from KSh 297.52 Mn, while current liabilities of KSh 261.29 Mn exceeded current assets of KSh 234.54 Mn, leaving the company in a net current liability position. Net cash from operations improved to KSh 37.46 Mn, though the gain was largely funded by a near-doubling of trade payables to KSh 213.87 Mn rather than stronger underlying cash generation.
SKL's share price closed at KSh 8.94 as of late April 2026, up 51.5% from its KSh 5.90 introduction price, reflecting investor confidence in the Kisaju thesis. Management expressed cautious optimism that the growth trend seen in Q1 2026 would continue through the year as the new plant approaches commissioning.
