The financial performance for the six months ended 31st March, 2018 from the operating activities indicate a profit after tax of Kshs 163.1 million, compared to a profit of Kshs. 107.9 million in the previous year. The increase in profitability was due to good weather conditions and higher price realizations especially in the tea sector despite the challenges experienced. The labour unrest adversely affected our production, sales volumes and quality of the tea.
The coffee division and avocado also experienced lower production due to weather changes which caused delay in harvesting, hence lower sales.
The net loss from changes in the valuation of biological assets of Kshs. 114.1 million (prior year loss Kshs 44.0 million), was driven by lower prices and volumes, but is expected to reverse in the second half.
In the second half of the year, production of both tea and coffee will improve due to improved weather. However, the gains in production may be depressed by lower expected prices for both commodities as supply may exceed demand in the market. The strengthening of the Kenya shilling against the US Dollar is also expected to depress our earnings.
Inspite of these challenges, our diversification strategies are on course as both our Avocado and Macadamia projects are expected to be operational before the end of financial year.
The Board recommends a payment of an interim dividend of K.shs 0.5(50%) per share for the period ended 31st March 2018, payable less withholding tax, where applicable, on or about 16th July 2018, to the members on the register at close of business on 2nd June 2018.