Kakuzi profit up 75pc on higher sales – Business Daily
Kakuzi Plc Managing Director Chris Flowers. PHOTO | DIANA NGILA | NMG
Agricultural firm Kakuzi has reported a 75.3 percent net profit growth in the half-year ended June, helped by higher sales and lower costs.
The company posted a net income of Sh341.2 million in the review period, up from Sh194.6 million a year earlier.
Sales increased 15.4 percent to Sh1 billion from Sh888.9 billion in what the company attributed to exports of more avocado and macadamia.
Kakuzi’s gross margins grew substantially, indicating that it benefitted from lower costs in its operations.
Its margins during the period increased to 46 percent from 28.8 percent a year earlier. The company did not give a breakdown of its costs but salaries and the running of its farms constitute the bulk of its expenses.
Kakuzi managing director Chris Flowers said avocado prices were low in the review period, adding that the company gained from selling more fruits.
“The prices for early season avocados were very poor, but they have slowly recovered as the months progressed. Having fruit in the market for as many months of the year as possible has helped shield us from the poor early season market,” he said in a statement on Thursday.
“In addition, entry into China is vital for Kenya. Market prices may be similar to European levels, but such a high volume additional market gives us a choice and diversified sales options.” Kakuzi has been seeking to diversify away from avocado and macadamia, which currently generate most of its sales.