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Companies

Lower cost of sales a boon for tea firms

Tea picking. Williamson says its revenues were pushed down by low production of tea across the sector. FILE PHIOTO | NMG
Tea picking. Williamson says its revenues were pushed down by low production of tea across the sector. FILE PHIOTO | NMG 

Williamson Tea Kenya Plc #ticker:WTK returned to profitability in the six months to the end of September on account of lower costs of sales and re-evaluation of biological assets even as Kapchorwa Tea Kenya #ticker:KAPC registered losses in the same period.

Williamson Tea’s unaudited results indicate it made an after tax profit of Sh43 million in the period under review from a loss of Sh263 million in the same period last year.

The firm says its revenues were pushed down by low production of tea across the sector, due to severe drought experienced in the first quarter of the year, a move that increased their earnings.

“Reduced supplies were met with good demand which boosted prices during the period under review,” said the company in a statement.

“The group reported a profit during the six months mainly from investment and other non-operational activities,” added the statement.

The company said the cost of production remains its biggest concern and the tea industry at large, citing the 2014 award of over 30 per cent wage increment to multinational tea employees.

On the other hand, Kapchorwa Tea Kenya Plc has reported reduced net loss of Sh14.5 million for the six months to the end of September compared to a net loss of Sh89.7 million last year, citing high costs of production and low sales volumes.

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