NAIROBI, Kenya Dec 9 – Tea and coffee producer Sasini Limited has announced a 40 percent drop in its net income to Sh526 million for the year ended September 30.
This compared to the Sh875.6 million realized during the same period in 2008.
The drop comes on the back of increased operating costs coupled with high power costs that orchestrated by power cost surge and rationing.
Despite the drop in income, overall turnover rose 50 percent to Sh2.18 billion buoyed by strong international tea prices.
During the period under review, the company posted a profit after tax, arising from operating activities of Sh137.2 million compared to a loss of 13.4 million in 2008.
“The increase in revenue was due to stronger international tea prices and an increase in tea and coffee production and sales,” Sasini managing director Caesar Mwangi said in a statement.
Total assets of the company increased to Sh8 billion due to revaluation carried out during the year.
Despite the effects of the drought, Sasini managed to increase its overall production in both tea and coffee.
The effects were however notable in the coffee sector where quality was compromised, which affected the proportion of premium grade coffee.
“As a result there was a decline in the prices realized per kilogram,” he said in the statement.
The tea business experienced improved price realization at the auction, fueled by under supply in the global tea market.
The company’s diversification into value added activities continues to bear fruit with positive results from new initiatives such as Savanna Coffee Lounge and export operations.
Going forward, Mr Mwangi said they would continue to focus on marketing efforts and enhancement of operational efficiencies.
“We believe this strategy will continue to bear fruit despite the challenging business environment.”
At next year’s annual general meeting, the directors are proposing a payment of a final dividend of Sh0.20 per share.