Listed agribusiness company Kakuzi PLC posted a pre-tax profit of Ksh 494.7 million in its half-year results announced on Thursday.
Supported by increased sales, particularly against the company’s strategic avocado and macadamia crops, and by steady revenue growth from its market and product diversification efforts, Kakuzi benefited from increased 60% of its pre-tax profits.
Speaking when confirming the half year results, Kakuzi Managing Director Mr Chris Flowers said the company’s pre-tax profit had risen to KShs 494.7 million from KShs 276.7 million. KSh posted during the same period last year. The company’s after-tax profit closed at Kshs 341.3 million, compared to Kshs 194.6 million in the same period last year, representing a growth of 75%.
The performance as of June 30, 2022 was inspired by the increase in sales which exceeded the Kshs 1.02 billion margin compared to the Kshs 888.95 million recorded during the same period last year.
During the trading period under review, Flowers revealed that prices for early season avocados in the international market started at a poor level, but continued to recover at the end of the semester.
Flowers said, “Early season avocado prices were very low, but slowly recovered over the months. Having fruit on the market for as many months of the year as possible helped protect us from the poor market at the start of the season. Moreover, entry into China is vital for Kenya. Market prices may be similar to European levels, but such a high volume supplemental market gives us choice and diversified selling options.
“As the avocado harvest season draws to a close in the coming months, we expect an increase in avocado exports this year crop cycle ‘ON’ as our diversification strategy continues to gain momentum. scale,” he added.
As part of the company’s revenue, product and market diversification strategy, domestic sales of macadamia and blueberries have been stepped up while avocado exports to China have just started.
Commenting on the half-year results, Kakuzi Chairman Mr. Nicholas Ng’ang’a noted that complex international markets, a growing cost base for many of the company’s key inputs and a global squeeze on consumer spending could affect the full year results, requiring the deployment of diversification strategy.
“Diversifying revenue streams remains a key strategic objective for the Company. We have embarked on this path for the international and national market with a range of new and value-added products. Currently, we have two main export products, avocados and macadamia nuts, but through strategic investments, we believe blueberry production will become the third pillar,” Ng’ang’a said.
He added, “At Kakuzi, we are excited about the market opportunities and prospects we can derive from our concerted efforts to produce high-quality, sustainably grown products and continue our journey of diversification. All of this is in line with our goal of improving return on investment for our shareholders and value for all of our stakeholders.
As part of its strategic goals, Kakuzi is also expanding the reach of its sustainable wood products to a higher value market and increasing sales volume remains a critical near-term goal as the market becomes increasingly aware of the benefits of using sustainably grown timber. some products.
The company’s livestock diversification is also progressing well with a ramp-up of its goatherd in the race to become a commercial producer of goatmeat and capitalize on the huge value-added potential in this sector.
Kakuzi announced his intention to hold Kenya’s flag high as he explored the international blueberry export market last week. The plans will see Kenya break into the global blueberry export market. Kakuzi and leading berry marketing company Driscoll’s have entered into a collaborative partnership to increase local and export volumes.