The financial performance for the half year ended 31st March, 2017 from the operating activities indicate a profit after tax and minority interest of Kshs 107.9 million compared to a profit of Kshs. 202.0 million (restated) in the same period in the previous year.
The decrease in performance recorded over this period was contributed by adverse weather conditions which led to lower production volumes in both tea and coffee. The rising input costs especially labour cost and lower prices in the first quarter, contributed to the decline in profitability. The net loss from changes in the valuation of biological assets of Kshs. 29.9 million (prior year loss Kshs 7.2 million as restated) for the half year was driven by lower prices and volumes.
The Board continues to explore and chart new pathways to strengthen the Company, enhance its efficiency and promote sustainability despite the difficult operating environment. In executing various projects which include Macadamia nuts, and Avocado production and processing, the Company will be able to achieve underlying opportunities as they arise.
In view of the profitability, the Board recommends the payment of an interim dividend of Kshs. 0.25 (25%) per share for the period ended 31st March 2017, payable less withholding tax, where applicable, on or about 4th July 2017, to the members on the register at close of business on 20th June 2017.
Restatement of the financials
These financials incorporate the amendments to IAS41- Agriculture and IAS 16- Property, Plant and Equipment that require that a bearer plant be accounted for as property, plant and equipment while the produce remain within the scope of IAS 41.
The Board expects that the profitability for the financial year will be lower by more than 25% of the prior year’s profit due to the substantial gains on disposal of assets registered in the prior year. The Board therefore announces a profit warning pursuant to Regulation G.05 (1) (f) & (2) of the Fifth Schedule of the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002 and for the information of investors and the general public.