This archive report was first published on 19 August 2020.
On August 19, 2020, Kakuzi reported an 11.08% growth in earnings for the first half of the year, largely due to lower corporate taxes.
The company's profit after tax for the period stood at Ksh 272.8 million, a significant increase from Ksh 245.6 million recorded in the first half of 2019. This growth can be attributed to the government's directive to reduce corporate tax by 5% to 25% in a bid to cushion companies against the economic impact of the pandemic.
However, Kakuzi's profit before tax for the first half of 2020 declined by 42.5% year-over-year to Ksh 204.1 million, down from Ksh 355.1 million in the same period the previous year. This decline was largely due to a financial provision written back in 2019.
Despite the challenges, the company's macadamia sales contributed significantly to its profits, with Kakuzi Chairman Graham Mclean stating that macadamia profits were greater than in 2019.
On the other hand, the company's tea operations made an operating loss of KSh 11.3 million, compared to a loss of KSh 1.1 million in 2019. Mclean attributed this loss to 'depressed prices' in the market, which was characterized by high supply.
Notably, Kakuzi maintained its avocado profits despite the pandemic's impact on the food services market. However, the company's avocado market suffered a double blow, with the closure of restaurants in Northern Europe and successive record arrivals of fruit from Peru, which flooded the market and crashed the price.
Half-year sales for the company grew by 43.7% to Ksh 889.9 million, up from Ksh 619.5 million in 2019. Earnings per share for the half-year were at Ksh 13.92, compared to Ksh 12.53 in the same period last year.
Despite the growth, Kakuzi's Directors do not recommend an interim dividend.
