Limuru Tea has warned of a 25 percent decline in its net profits for the year ended December 31, 2021, citing lower green leaf volumes.
The Nairobi Securities Exchange-listed firm attributed the decline in profits to rising production costs amid the COVID-19 economic disruption.
According to a notice to shareholders, the company expects to record a decline of more than 25 percent in net profits, primarily due to lower green leaf volumes realized in 2021 compared to 2020.
Tea earnings have continued to perform poorly in the international market, with a 9.1 percent drop in the third quarter of 2021 compared to the same period in 2020, as per the Kenya National Bureau of Statistics (KNBS) data.
KNBS reported that earnings from tea exports deteriorated from Sh30.5 billion in the third quarter of 2020 to Sh27.7 billion in the review period, largely due to a decline in export quantities from 138.6 thousand metric tonnes to 124.5 thousand metric tonnes.
Limuru Tea is not the only firm to issue a profit warning, as Kakuzi also anticipated a 25 percent drop in net profits for the year ended December 31, 2021, attributing the poor performance to a drop in avocado production and lower global market prices in European markets.
