Two Kenyan companies have issued profit warnings, signalling a turbulent financial year for the tea industry.
In statements released May 20, Kapchorua Tea Kenya PLC and Williamson Tea Kenya PLC projected a decline of more than 25% in after-tax earnings for the financial year ending March 31, 2025, compared with the previous year.
The boards of both firms attributed the expected drop in profitability to global market imbalances and unfavourable currency trends. Specifically, they cited the global tea supply outpacing demand and a strengthening Kenyan shilling against the U.S. dollar.
“The drop in profits is largely attributed to depressed market prices following an oversupply of tea against demand as well as a strong Kenya shilling against the U.S. Dollar,” read the notice signed by Company Secretary G.K. Masaki.
Williamson Warning to Shareholders
The Board of Directors of Williamson Tea Kenya PLC announced that the company’s after-tax earnings for the financial year ended March 31, 2025, are projected to decline by more than 25% compared to the previous year’s earnings.
The company attributed the expected earnings drop to low global tea prices caused by oversupply and the appreciation of the Kenyan shilling against the dollar.
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“The Board and management continue to address strategic cost, operational efficiency, and product quality initiatives to deliver improved results,” the statement said.
Kapchorua Warning to Shareholders
Similarly, Kapchorua Tea Kenya PLC issued a notice warning shareholders of a more than 25% decline in after-tax profits for the same financial period.
The company pointed to the same market conditions, oversupply in global tea markets and currency fluctuations as primary drivers behind the projected decline.
“The Board and management continue to address strategic cost, operational efficiency, and product quality initiatives to deliver improved results,” said the company in its statement.
Both disclosures were issued in accordance with Paragraph 14.5.7 of the Thirteenth Schedule of the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2023.
Profit Warning Preparedness
Despite the financial headwinds, both companies emphasized their continued focus on efficiency and strategic reforms to stabilize future performance.
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Kapchorua and Williamson are major contributors to Kenya’s export earnings.
As of 2024, the price of Kenyan tea has fluctuated around 300 U.S. cents per kilogram (approximately $3.00 per kg), with some variability throughout the year.
About Kapchorua and Williamson
Kapchorua Tea Kenya PLC, based in Nandi Hills, grows and manufactures tea under the Williamson Tea brand and also has interests in forestry. The company was renamed in 2017 and is listed on the Nairobi Securities Exchange.
Williamson Tea has been growing and producing high-quality teas in Kenya since 1869. The company operates farms in the West of the Rift Valley, an area renowned for premium tea cultivation.
Williamson emphasizes sustainable farming through a blend of natural practices, modern technology, and community engagement.
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