Commodities

Limuru Tea Issues Profit Warning on Eroding Shilling Value

January 11, 2024
699 1 minute read
#image_title

Limuru Tea Plc, a key player in the green-leaf tea industry and a major supplier to eKattera Tea Kenya PLC (eTK), has issued a profit warning for the financial year ending December 2023.

The company is currently grappling with margin pressures stemming from various cost factors impacting its operations.

The Board of Directors of Limuru Tea Plc attributes the anticipated decline in profitability to a notable increase in operational costs.

According to a notice to shareholders, the board identified rising industry wage rates as a significant contributor to heightened labor costs.

Additionally, the depreciation of the Kenyan shilling against the US dollar has led to increased expenses for imported fertilizers, further exacerbating financial strain for the company.

Furthermore, the company expects a valuation loss in its “biological assets,” likely referring to its tea plants.

This projection could also be linked to adverse weather conditions or diseases affecting the tea plants, adding to the complexities faced by the tea industry.

In contrast to the anticipated decline in 2023, Limuru Tea Plc experienced a remarkable turnaround in the previous year.

The company reported a 46 percent increase in total revenues and posted a pre-tax profit of Ksh.16.3 million, a significant improvement from a loss of Ksh.14.2 million in 2021.

This positive performance resulted in a recommended dividend of Ksh.2.50 per ordinary share for the year ending December 31, 2022.

As Limuru Tea Plc faces the headwinds of increased operational costs in the current fiscal year, stakeholders and industry observers will be closely watching the company’s strategic responses to maintain its financial resilience and sustain its positive trajectory in the highly competitive tea market.

January 11, 2024
699 1 minute read
Monitor Your Business Transaction
Photo of Collins Ogutu

Collins Ogutu

Nairobi based Digital Journalist, Corporate Communication Expert and Digital Marketer with a wealth of experience in multimedia. Accredited member of the Media Council of Kenya.

Related Articles

Absa Increases Affordable Housing Investment Portfolio to Ksh.1 Billion

Absa Increases Affordable Housing Investment Portfolio to Ksh.1 Billion

1 day ago
How Wildebeest Migrations Feed Flamingos' Pink Plumage

How Wildebeest Migrations Feed Flamingos’ Pink Plumage

1 day ago
Trump Orders Universal 50% Tariff on Imports of Certain Copper Products

Trump Orders Universal 50% Tariff on Imports of Certain Copper Products

1 day ago
Microsoft Hits $4 Trillion Market Cap on Strong Earnings

Microsoft Hits $4 Trillion Market Cap on Strong Earnings

1 day ago

699 Comments

  549. I can not participate now in discussion – it is very occupied. I will be released – I will necessarily express the opinion on this question.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button