Limuru Tea Profit Dips 28.2 Pc To Ksh8.1 Million

Limuru Tea PLC profit for the full year to December 2023 has dropped 28.2 per cent to Ksh8.1 million from Ksh11.3 million in 2022.

The company has attributed the plunge in profit for the trading period to high inflation, adverse foreign exchange market impact and an increase in industry wage rates.

“This decline in performance is driven by inflation and adverse FX impact on key raw material inputs mainly fertilizer. Additionally, increase in industry wage rates continue to put pressure on the cost of operations,” stated Limuru Tea Chair Dorcas Muli.

For the full year ended December 2023, total revenues jumped 12 per cent to Ksh137.8 million driven by volume growth, quality improvement and positive impact from FX of made tea prices.

This is from Ksh122.9 million Limuru Tea posted in a similar period the previous year.

Production soared 13 per cent to 3,388 tons from 3,005 tons backed by improved agronomic activities and favourable weather in the last quarter of 2023.

“Management will continue to put in place cost efficiency programs to mitigate the impact of cost inflation and sustain the quality improvement strategies that will yield better returns to shareholders,” stated the firm’s chair Muli.

Limuru Tea has recommended a dividend of Ksh1.00 (2022 Ksh2.50) per ordinary share payable on or after 30th June 2024.

Looking ahead, the firm is keen on strategizing growth and improving its performance even as made tea market prices remain volatile.

“Raw material costs and wage inflations remain a risk and management will continue to drive cost management initiatives to mitigate the impact,” added Muli.

Limuru Tea PLC was among the last listed firms to issue a profit warning for the financial year ended 31st December 2023 on increased operational costs due to increased costs of labour driven by higher industry rate wages.

In addition, the listed firm attributed a surge in the cost of importing fertilizer as a result of the depreciation of the Kenya Shilling against the US dollar to the profit alert.

Read: Limuru Tea PLC Issues Profit Warning On Increased Operational Costs