Sasini Tea & Coffee, a key player in Kenya's tea and coffee sector, has reported a significant 53.6% decrease in net profits, dropping to Sh542.6 million (US$3.43M). This decline follows a seven-year high in net profit at Kes1.17 billion (US$7.39M). The company attributes the sharp decline to an "extremely challenging" period, mainly due to adverse weather conditions in the first half of the year, impacting production volumes, price realizations, and production costs.
Revenue also fell by 22% to Kes5.72 billion (US$36.15M), and expenses increased, contributing to the overall profit decline. The collapse in the macadamia market and the US recession highlighted global market vulnerabilities. The delayed start of the avocado export season added to Sasini's challenges, emphasizing the complexities faced by the agricultural sector.
Despite setbacks, the tea, avocado, and coffee trading units remained profitable, with the tea unit achieving its best-ever performance. The coffee estates and macadamia units recorded negative results. The management remains resilient, seeking strategic partnerships to navigate the changing business environment. In a surprising move, Sasini increased its dividend payout by 50% to Kes342.1 million (US$2.16M), demonstrating commitment to shareholders. This decline in profits follows a November 2023 profit warning, indicating some foresight but reflecting the severity of economic conditions.
