This archive report was first published on 6 January 2022.
January 6, 2022 - Nairobi, Kenya
Kenyan agribusiness firm Kakuzi Plc has issued a profit warning notice, citing lower avocado yields in 2021 as the reason for the anticipated lower full-year earnings.
According to the notice, the firm's earnings are expected to be at least 25% lower than the 2020 earnings, which were reported at the end of December 2020.
Kakuzi Plc Chairman Nicholas Ng'ang'a attributed the lower yields to the firm's avocado orchards entering their bi-annual production cycle, resulting in lower volumes than in 2020.
Ng'ang'a also mentioned that the firm's order book from international markets was far in excess of the farm yield volumes, and that the Board had tasked the management team to accelerate the execution of a product and markets diversification strategy.
The strategy aims to mitigate global market volatility and overreliance on the flagship export product, avocado.
Ng'ang'a added that the lower avocado yields had also suffered from lower market prices in European key markets due to a significantly higher supply of fruit from Peru and Columbia, amidst low consumption trends due to the Covid pandemic.
However, Kakuzi's other crops and revenue streams performed as expected, with an increasingly strong performance from the Macadamia business, validating the investments made into diversification over the years.
"As a responsible listed entity, we are taking this early opportunity to issue the profit warning notice, which is also consistent with the half-year earnings statement and commentary issued in August last year," Ng'ang'a said.
