Agricultural firm Sasini PLC has issued a profit warning for the Financial Year ending September 30, 2024.
In an advert on August 14, Sasini said the warning is based on the Company’s forecast of the financial results and taking into consideration the information currently at the Board’s disposal.
The Board’s Chairman Dr James Boyd McFie explained that the announcement is pursuant to the provisions of Regulation 14.5 (14.5.7) of the Thirteenth Schedule of The Capital Markets (Public Offers, Listings, and Disclosures) Regulations, 2023.
“Sasini PLC makes this profit warning announcement for the benefit of our esteemed investors and the public. We anticipate that our projected net earnings for the year to 30th September 2024 will be 25% lower than the reported earnings for the year ended 30th September 2023,” Boyd said.
Sasini PLC’s financial records for the year ended September 2023 had indicated a net profit of Ksh542.55 million.
Therefore, the profit warnings means that Sasini projects a massive drop of about Ksh136.6 million this ending financial year.
Sasini Explains Expected Profit Decline
The Board explained that business performance for the period has been adversely affected by several extenuating circumstances in the global macro environment.
The major factors were the global economic situation and continuing geopolitical disruptions in the Company’s business value chain.
“We’ve faced a higher than expected cost of production for all of our crops, depressed commodity prices especially in our tea business, closure of the Suez Canal which has grossly disrupted logistics for our products and especially the fruit business into European markets, giving us challenges with the perishable nature of that business, lengthy recession in our key nuts market in the United States heavily lowering demand, and supply disruptions caused by the legislative changes in the coffee sector,” Boyd stated.
Whereas the short-term outlook is affected by the above factors, the Board foresees a steady recovery in the mid-term period leading to an expected return to stronger results in the 2025 horizon.
This would mean that the Company will record a decrease in profit for the second consecutive financial year.
Also Read: Sasini Joins List of Companies Facing Tough Times
2023 Profit Decline
In the Financial Year ended September 2022, Sasini posted the highest net profit in seven years attributed to increased revenues and reduced costs.
The Company recorded a net profit of Ksh1.17 billion, almost double the Ksh573.2 million posted the previous Financial Year.
This was the first time a firm listed in the Nairobi Securities Exchange recorded a billion shillings profits since 2015.
However, in the financial year ended September 2023, the profit dropped by 53% to Ksh657.5 million.
Also Read: Local Companies Firing Employees in 2024
Areas of Operation
Sasini is a publicly quoted company listed on the Nairobi Securities Exchange with over 6,000 shareholders, the majority of whom are Kenyans.
The principal activities of this Company, which straddles the breadth of Kenya, include the growing and processing of tea, coffee, avocado, macadamia nuts and value addition of the related products for local retail and export markets, including tea warehousing facilities in the port town of Mombasa.
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