Earnings UpdateLimuru Tea Posts 8% Decline in Revenue to Kes 47 Million HY2021

Farmer picks tea in a farm in Kericho, Kenya.

Limuru Tea recorded total revenue of  Kes 47 million in the period ended 30th June 2021, an 8% decline as compared to Kes 51 million realised during the same period of 2020. The decline was attributed to lower production volumes and declining market prices.

In the first half of 2021, the company reported they produced 1,901 Tons of green leaf, which in turn was manufactured into 433 Tons of black tea. This was a 6% decrease in Made Tea volumes compared to the first half of 2020.

The Nairobi securities exchange-listed company posted a pre-tax loss of Kes 8 million in the first half of 2021 compared to a pre-tax loss of Kes 11 million in 2020. This improvement in performance is driven by cost efficiencies undertaken by the business.

Net assets in the tea company stood at Kes 108 million during the period ended 30th June 2021 a 5 % decline compared to the Kes 114 million recorded during the same period in 2020.

Limuru Tea Outlook and Dividend

Limuru  Tea has expressed optimism in the performance of the company in 2021. However, they expressed their concern about the low tea market prices.

“We have witnessed a modest first half of 2021 in terms of production. Whilst the low Tea market prices remain a concern, the management will keep undertaking strategic initiatives of cost efficiencies and quality improvement to ensure the company maximize the returns.” Limuru Tea in their financial company.

The board of  Directors did not recommend the payment of an interim dividend.

Limuru Tea PLC owns 275 hectares of tea plantations situated four kilometres to the east of Limuru Town. The Company is an outgrower to Unilever Tea Kenya Limited (UTKL), the largest private-sector tea company in Kenya. UTKL acts as the Limuru Tea Company’s managing agent in the growing, manufacturing, sales and marketing of its tea. The Limuru Tea estate green leaf is manufactured in the nearby UTKL’s Mabroukie factory from where it is sold mainly for export.

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