This archive report was first published on 29 July 2019.
July 29, 2019 - Coffee firm Eaagads Limited has made a remarkable recovery, posting a pre-tax profit of Ksh1.7 million for the year ended March 31. This is a stark contrast to the Ksh51.8 million loss it recorded during a similar period last year.
According to Eaagads' financials, the company's revenue rose by 115% year-on-year, from Ksh83.7 million in 2017/18 to Ksh179.6 million in 2018/19. This significant increase in revenue was largely driven by a 265% jump in coffee sales, from 154 tons in 2017/18 to 419 tons in 2018/19.
Despite the increase in revenue, Eaagads' cost of production also rose, with picking and wet processing costs increasing by Ksh28 million. However, the company's financial turnaround was largely attributed to its ability to manage costs effectively.
However, Eaagads' financials are not yet substantial enough to warrant a distribution to shareholders. The company's board of directors has therefore decided not to recommend payment of a dividend for the year ended March 31, 2019.
Looking ahead, Eaagads has painted a bleak future for the coffee industry, citing the early year drought and a fall in international coffee market prices to a decade-long low. The company expects a significantly lower harvest this year, with initial expectations pegged at 350 tons.
