Agricultural firm Sasini recorded a 30.8 per cent net profit drop in the year ended September on a larger tax charge and relatively lower gains from asset sales compared to the year before.
The company’s net profit dropped from Sh1.1 billion to Sh761.8 million in the review period. Sasini incurred a tax charge of Sh258.9 million compared to a tax credit of Sh61.9 million a year earlier, eroding its bottom-line.
“This is arising from de-recognition of a deferred tax asset in one of the subsidiary company,” the Nairobi Securities Exchange-listed firm said in a statement.
Gains from assets disposal stood at 422.7 million compared to the Sh830.7 million that boosted the earnings previously.
Sasini has sold some of its land in agricultural operations it says are unprofitable, recording large capital gains from the land parcels it bought decades ago.
These include land in its two coffee estates in Nyeri — Mweiga (266.7 acres) and Wahenya (247 acres) — that it said had been running losses for six consecutive years.
The company’s revenues and earnings from normal operations grew significantly on the back of increased production and higher prices of tea and coffee.
Sales jumped 28.1 per cent to Sh3.5 billion, raising the gross profit to Sh974 million from Sh733 million.
Sasini produced 11,108 tonnes of tea in the review period compared to 8,578 tonnes the year before, with the commodity’s price per kilogramme rising marginally to an average of Sh196.4 from Sh194.3.
Despite the profit drop, Sasini had already moved to pay a second interim dividend of Sh1.25 per share on or about January 31 to shareholders on record as of January 12.