Listed firm Sasini Group posted a net loss of KSh 337.7 Million for the financial year ended 31st September 2019. This is compared to a net profit of KSh 293.5 Million over a similar period last year.
Sasini PLC, firm that owns vast Tea, Coffee, Macadamia and
Avocado plantations, posted a decline in cost of sales by 11 per cent to KSh
2.4 billion from KSh 2.7 billion and consequently a reduction in Gross Profit
from KSh 852 Million to KSh 434.7 Million as at September 31st, 2019.
“Generally, global tea and coffee prices have dipped to
their lowest in 10 years. The Avocado business maintained a steady performance
despite a poor crop and harvest due to drought for most of the year,” said Dr
James Boyd Macfie-Chairman of the Board of Directors, Sasini Group Plc.
The Group mentioned that while its Macadamia business has shown potential, especially in the processing and trading activities, the business is still in the infancy stages having only been established in late 2018.
“Our expectation for the year’s performance was severely
affected by the significant dip in the tea and coffee prices experienced during
the year. This was further compounded by severe weather conditions, high cost
of production manifested in labour and input costs and compounded by severe
weather conditions, high cost of production manifested in labour and input
costs and lower production volumes especially in tea,” said Martin Ochieng,
Sasini Group CEO.
In its commentary, the firm stated that prices were lower than the cost of production throughout the financial year, leading to the absorption on of cash reserves to support the continuation of the business.
Despite these challenges, the firm says its diversification
strategy is on course and the new lines of business are active and are expected
to improve performance in 2020.
“The coffee produce went through a challenging period following prolonged extremely cold weather in prior year coupled with a dry period in the second quarter, which affected quality and size of the coffee beans and price,” said the firm.