Listed agricultural firm, EAAGADS, which specializes in coffee production and marketing, has said it projects its profitability for the financial year ending 31st March 2020 to be lower by at least 25%.
EAAGADS’ board of directors says the drop in profitability has been occasioned by a dip in coffee production that resulted from dry weather conditions during the first half of the year.
Low global coffee prices due to oversupply by Latin American coffee producing countries coupled with increased labor costs have also contributed to the firm’s projected decline in profitability.
The firm’s board made this announcement even as it announced a half-year net loss of 43.3 million shillings.
The loss, which was 7% lower compared to the previous year’s loss of 46.6 million shillings, was occasioned by a near 59% decline in its sales revenue.
The decrease was attributed to depressed international coffee prices due to an oversupply in South American coffee producing countries as well as suppressed production volumes.