This archive report was first published on 14 November 2019.
On November 14, 2019, Eaagads Company Limited issued a profit warning for the financial year ending 31 March 2020, anticipating lower earnings by at least 25% compared to the previous year's audited earnings.
The company's management is adopting cost-cutting measures to mitigate the impact of falling coffee prices and increasing production costs.
“Eaagads Limited hereby announces that the earnings for the financial year ending 31 March 2020 could be lower by at least 25% of the earnings reported in the audited financial statements for the year ended 31 March 2019,” declared Evans Monari, Eaagads’ Board chairperson.
Kenya's coffee production has faced numerous challenges, including unpredictable weather patterns caused by global warming, which have affected coffee output in the country.
The high temperatures have also hindered the flowering of the coffee crop, resulting in lower yields.
Global coffee prices have continued to fall, with prices in the New York Coffee Exchange remaining low due to oversupply from South American countries like Brazil and Colombia.
Additionally, increasing labor costs have pushed production costs higher year on year, further exacerbating the challenges faced by Eaagads and other coffee producers in Kenya.
