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Kakuzi issues profit warning on low avocado production

Kakuzi issues profit warning on low avocado production

Kakuzi PLC has issued a profit warning notice to their investors on anticipated lower full-year earnings.

The company’s earnings will be at least 25 percent lower than that reported for the year ended December 31, 2020.

This comes against the backdrop of lower production and export of the avocado of the ‘Hass varieties’.

In a notice by Chairman Nicholas Ng’ang’a, said the move has been informed by trading information among others, market forecasts and the preliminary unaudited full-year results.

“We, therefore, wish to report that our net earnings for the year ended 31st December 2020. We are taking this early opportunity to issue the profit warning notice, which is also consistent with the half-year earnings statement and commentary issued in August last year.”

Last year, the company’s half-year trading posted a 3 percent drop in its profit before tax after posting Ksh.276.7 million earnings down from Ksh.285.9 million posted within the same period in 2020.

Ng’ang’a attributed the drop in the firm’s earnings as a result of lower yields as the productive avocado orchards had entered their bi-annual production cycle .

Lower global market prices in European markets also contributed to its downward performance due to an oversupply of fruits from Peru and Columbia.

However, Kakuzi’s other crops such as  the macadamia business, recorded strong performance following its diversification strategy which aims to mitigate the global market volatility and overreliance on any one product.

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