Listed local agri-business firm Kakuzi Plc has announced a marginal drop in its half-year pre-tax profit attributed to slower market growth and price volatility in its key export markets due to the Covid 19 pandemic.
In its half-year trading disclosures released by Chairman Nicholas Ng’ang’a, Kakuzi Plc confirmed a 3% drop in its profit before tax after posting KSh 276.7 million earnings down from KSh 285.9 million posted within the same period last year.
To sustain trading growth and mitigate market risks, the firm, he said, has swiftly moved to enhance its operating efficiencies. Further attention, he said, has also been applied to a diversification and value addition strategy for opportunities in the local market.
The leading international markets for Kakuzi products, though negatively impacted by the COVID pandemic, have begun to show positive recovery signs with growing demand in the traditional key nut markets.
The firm, he disclosed, is anticipating a significant drop in avocado production as the orchards enter into what is known as an ‘Off’ year. “Bi-annual bearing in avocado production is common, with an ‘on’ year yield being higher than an ‘off’ year yield. After last year’s bumper harvest, this year’s production is in an ‘off’ cycle.”
He stated that the market position in Europe for avocados is not as buoyant as experienced in previous years.
“High supply levels of avocados into Europe from Peru and COVID restrictions have occasioned downward pressure on prices. At this stage, it is too early to predict the full impact of these developments on the Company’s full-year performance, but we continue to actively monitor,” Ng’ang’a said.
He added that “The mid-year is always a challenging time to make any precise projections for the year-end performance. We have a good balance of products to market, though, given the unique circumstances of the last 18 months that the world finds itself in, we remain exposed to market and price volatility. To further raise our revenues, we continue to look at other value addition and local sale opportunities for our products.”
At the field operating level, the Company he said is currently witnessing lower output against its avocado harvests, but macadamia nuts’ production remains within earlier projections for the year.
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