Coffee farm Eaagads Limited has reported a profit before tax of Kes 4.7 million during the financial period ended 31st March 2021 compared to the loss before tax of Kes 77 million recorded during the previous financial year. The company attributed the performance to increased production as they reported they produced 233 tonnes of coffee compared with 114 tonnes produced last year.
The increase in production is a result of the favourable weather experienced in the year, which led to flower formation of the late crop for 2020 and improved coffee prices. As a result of the improved yield, the company achieved sales of 233 tonnes of coffee during the period ended 31st March 2021 as compared to 127 tonnes achieved in March 2020. The average price realized during the year 2021 increased to USD 5.52 per kilogram from USD 3.75 per kilogram in the previous year.
Revenue in the Nairobi securities listed firm recorded a 187% improvement from Kes 48.6 million recorded in 2020 to Kes 139.7 million during the period under review.
However, coffee upkeep costs, picking costs and wet processing costs increased by Kes 11.5 million while Crop commission charges also increased by Kes 2.5 million in line with increased sales.
Eaagads Limited Outlook and Dividend
Eagaads Limited expressed their concern on expectations of lower coffee production in 2021 saying.
“Production for 2021-22 is expected to be lower than demand mainly due to low production expectations in Brazil. Looking forward, the prices are likely to remain attractive in 2021-22 coffee years as the world looks at depressed production. Eaagads coffee continues to attract a premium in the market due to its quality, although it is still impacted by the International coffee prices. The farm is under the management of CMS”. Eaagads in their financial results.
However, International coffee market prices have greatly improved due to increased demand attributable to the success of vaccination across the globe, which has resulted in the easement of COVID-19 pandemic restrictions. According to ICO, globally, 2020-21 production is forecasted at 169.5 million bags and demand of 167.2 million bags.
The Board of Directors did not recommend payment of a dividend for the year ended 31 March 2021.