Kakuzi PLC has issued a profit warning for the year ending 31st December 2023.
Through a notice, the listed agro-processing firm has warned that its profit for the trading period will shrink by at least 25 per cent compared to what it posted in a similar period in 2022.
Kakuzi has attributed the expected drop in profits to a fall in demand and price of macadamia in global markets.
“This anticipated drop in full-year net earnings is mainly as a result of our macadamia business which is expected to post a loss due to a significant decline in demand and price in the global markets of China, Japan and the USA,” stated Kakuzi in a notice.
However, the firm has noted that other crops are performing well and avocado is expected to post a strong performance for the fiscal year to December.
“The profit warning announcement is based on the performance to date with reference to information currently available,” added Kakuzi.
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Kakuzi becomes the 13th Nairobi Securities Exchange (NSE)- listed firm to issue a profit warning since the beginning of 2023.
The number of NSE-listed firms that have already issued profit warnings for the fiscal year ending 31st December 2023 has expanded to seven.
The listed firms are in the sectors of commercial, agricultural, automobile and construction.
The Board of Directors of Nation Media Group PLC (NMG) issued a profit warning for the financial year ending December 31, 2023, citing the weakening of the Kenya Shilling, rising interest, higher taxes and a surge in the global price of newsprint to the expected slump in profits.
Read: Avocados From Peru, Columbia Eats Into Kakuzi’s Profits
Leading supplier of automotive, power generators, construction and industrial engineering equipment Car & General Kenya PLC also joined the list of firms issuing profit warnings.
Read: Car & General Issues Profit Warning On Dollar Strengthening, Surge In Finance Costs
Car & General warned its profit for the fiscal year ending 31st December 2023 will sink by more than 25 per cent compared to the prior year on account of foreign exchange losses and deterioration of unit economies of motorcycles which hurt motorcycle sales in Kenya.
Agricultural firm Sasini PLC’s profit for the trading period to 30th September 2023 is expected to drop by at least 25 per cent compared to what it reported a year prior occasioned by the very high cost of production due to the unplanned escalation of input costs.
Sasini has also attributed the performance to the prolonged severe drought that hit the country during the first six months of the financial year which negatively affected coffee production volumes.
Listed paint maker Crown Paints Kenya PLC, Marketing and Communication group WPP Scangroup PLC and Sameer Africa have also alerted the public and shareholders that the profit for the fiscal year ending 31st December 2023 will drop by at least 25 per cent.
Crown Paints attributed the expected drop in performance to the increased cost of raw materials, increase in transportation costs and weakening of the Kenya Shilling against the dollar.
On the other hand, WPP Scangroup has attributed the expected dip in earnings to a subdued economic environment in the market which has led to cautious spending by its clients on advertising, marketing and communication.
Sameer has attributed the decline in profit to the depreciation of the Kenya Shilling against major currencies.
“This has seen the company incur substantial foreign exchange losses for the period arising from the translation of foreign-currency-denominated liabilities,” stated Sameer Africa Company Secretary Mercy Mbijiwe.
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