Kakuzi Plc, one of Kenya’s leading agribusiness companies, has issued a profit warning for the financial year 2023, citing a significant decline in demand and price for its macadamia nuts in the global markets.
In a statement released to the shareholders, Kakuzi said that it expects its net earnings for 2023 to be at least 25% lower than those of 2022. The company attributed this to the poor performance of its macadamia business, which is expected to post a loss due to reduced demand and price in China, Japan, and the USA, which are the main export destinations for the crop.
However, the company said that its other crops, such as avocado, tea, coffee, and pineapple, are performing as per expectations and that it expects a strong performance from its avocado business, which is in its ‘ON’ year cropping cycle.
The company also said that it is implementing various strategies to mitigate the impact of the macadamia downturn, such as diversifying its markets, improving its quality and productivity, and enhancing its environmental and social sustainability.
Kakuzi Plc is one of the largest producers and exporters of avocados and macadamia nuts in Kenya, with over 10,000 hectares of land under cultivation. The company also produces tea, coffee, pineapple and forestry products. The company is listed on the Nairobi Securities Exchange and has a market capitalization of about 3.8 billion shillings as of November 27, 2023.
According to its 2022 annual report, the company posted a net profit of KES 1.1 billion, up from KES 686 million in 2021, representing a 60% increase. The company attributed this to the favorable prices and volumes of its avocado and macadamia crops, as well as the cost savings and efficiency measures implemented during the COVID-19 pandemic.
The company also declared a dividend of KES 30 per share for 2022, up from KES 20 per share in 2021.
Kakuzi Share Price Performance on NSE
The company’s share price closed at KES 386 on November 27, 2023, up by 1% from the previous day. The share price has increased by almost 6% per year on average over the last three years, while the earnings per share has increased by 1% per year on average over the same period