Nairobi — Kakuzi has issued a profit warning anticipating at least a 25 percent drop in net profits for the year ended 31 December 2021.
The Nairobi Securities Exchange-listed company has attributed the poor performance to a drop in avocado production and lower global market prices in European markets.
"The profit warning arises from trading information, market forecasts, and the preliminary unaudited full-year results among others," read a statement from the firm.
The firm reported that production in 2021 was 18 percent lower than in 2020.
As for the European markets, Kakuzi noted that the lower prices were due to an oversupply of fruit from Peru and Columbia which impacted prices during the same period that Kakuzi’s fruit was also in the market.
Even so, the firm reported that its other crops such as tea have performed as expected over the year with an increasingly strong performance from the macadamia business.
"Continuing this product diversification strategy is of critical importance. This strategy aims to mitigate the global market volatility and overreliance," said Kakuzi chairman, Nicholas Nganga in a statement.
The announcement, however, didn’t have an impact on the firm’s counter at the NSE, the Kakuzi counter actually gained by 9.09 percent in the mid-morning at Sh420 per share.