NAIROBI, Kenya Feb 25-Unga Group PLC has issued a profit warning for the first six months of the year ended December 31 2021 forecasting a 25 per cent dip in profits compared to the prior year.
The Nairobi Securities Exchange-listed company said its half-year profit is likely to drop on the back of increased costs of raw materials attributable to global shortages, upsurge of freight costs, and a weakened Kenya shilling which have caused the escalation of the price of finished goods.
“Subsequently, demand and purchasing power decline have led to reduced volumes in our human and animal nutrition segments,” read a statement by the company.
The company expects the raw material situation to remain a challenge in the second half of the year ending June 30 2022.
“The Board and management are working on strategies to counter the existing challenges to deliver improved performance for the company,” it said.
Unga Group also started its 2020/2021 financial year on a sour note with net profit for the six months to December 2020 falling by 45 per cent to Sh83.47 million from Sh151.32 million in the same period in 2019.
Other NSE-listed companies such as Kakuzi, Sanlam, and Limuru Tea have also issued profit warnings.