Kakuzi posts 341m profits on export sales

Kakuzi staff packaging avocados for export in May 2022. [David Gichuru, Standard]

Kakuzi has posted Sh341.3 million in profit after tax for the half-year ended June 30, 2022, on the back of increased exports and a diversified portfolio.

The listed agricultural firm said this year's net profits rose 75 per cent compared to the same period last year, driven by improved commodity prices and entry into new markets.

"The prices for early season avocados were very poor, but they have slowly recovered as the months progressed," said Kakuzi Managing Director Chris Flowers in a statement yesterday.

"Having fruit in the market for as many months of the year as possible has helped shield us from the poor early season market. In addition, entry into China is vital for Kenya."

Mr Flowers said prices in China may be similar to those in European markets, but the increase in volume provides an opportunity to diversify its exports.

"As the avocado harvest season comes to a close in the next few months, we are anticipating higher avocado exports," he said.

Overall sales hit Sh1.02 billion in the six months, up from Sh888.9 million recorded over the same period last year, with pretax profits standing at Sh494.7 million, a 60 per cent increase compared to Sh276.7 million last year. The increase in sales has been attributed to the firm's avocado and macadamia exports, as well as increased domestic sales of blueberries.

Kakuzi Chairman Nicholas Ng'ang'a said the complex international markets, an increasing cost base for the firm's key inputs, and a global squeeze in consumer spending may affect full-year results.

"Diversification of income streams remains a key strategic goal for the company," he said. "We have embarked on this for the international and domestic market with a range of new and value-added products."

The firm has two main export products, avocados and macadamia, but is looking at blueberry production becoming a third pillar. The firm is also expanding the scope of its sustainable wood products into a higher-value market and increasing the sales volume during the short-term.