Fruit maturity testing at Kakuzi/KAKUZI Agricultural firm–Kakuzi has reported a 48.6 per cent decline in net profit for the year ended December 2021, due to reduced earnings from avocado exports.
The Nairobi Securities Exchange-listed firm on Wednesday reported a Sh319.7 million net profit for the year under review.
This is down from Sh622 million it posted in a similar period the previous year.
“The year saw the group post reduced earnings due to lower avocado production and prices. This was due to the avocado orchards entering their bi-annual offseason bearing cycle which results in a large crop of avocados in one year, followed by a small crop the following year,” chairman Nicholas Ng’ang’a said.
Its exports, however, were hit in October 2020 into the first quarter of 2021 after a number of retailers, among them giants Tesco, Sainsbury’s, and Lidl boycotted its supplies in the European market.
This was after accusations of engaging in serious human rights violations in Kenya. It resumed exports in the second quarter of last year.
Its total sales for the year 2021 fell 8.6 per cent to Sh3.23 billion from Sh3.61 billion the previous year, its financial statement shows.
“We, however, experienced greater earnings from macadamia sales during the year as a result of increased yields from our young orchards,” Ng’ang’a notes.
He said product diversification and value addition remain key investment areas to enhanced stakeholder value.
Despite the drop in profit, the board has recommended an increase in the dividend per share to Sh22.00 compared to Sh8 per share in 2020.
This translates to a payout of Sh431.2 million up from Sh352.8 million.In January, the firm issued a profit warning saying its earnings would be at least 25 per cent lower than that reported for the year ended December 2020, which was attributed to lower yields from avocado.Kakuzi’s order book from the international markets was far in excess of the farm yield volumes, Ng’ang’a had said.The board tasked the management team to accelerate the execution of a product and markets diversification strategy, including enhanced domestic sales.The strategy was aimed at mitigating the global market volatility and over reliance on the flagship export product.