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Kakuzi cuts dividend on Sh132m net loss after avocado exports fall
Kakuzi Limited Managing Director Chris Flowers makes his remarks during the launch of ESG Report 20210 by Kakuzi Limited at the NSE on December 20, 2022.
Listed agriculture firm Kakuzi has slashed its dividend by two-thirds to Sh8 per share after falling to a net loss of Sh131.7 million in the year ended December 2024 from a net profit of Sh453.5 million in 2023.
The dividend, which will be paid out to shareholders appearing on the company’s books on May 31, represents the lowest payout since 2017 when Kakuzi distributed Sh7 a share.
Kakuzi’s sales fell by 11.3 percent to Sh4.79 billion due to lower volumes of avocado exports, which declined to 2.22 million cartons from 3.07 million cartons exported the previous year.
It also booked an exchange loss of Sh197 million on its dollar holdings following the appreciation of the shilling by 21.1 percent versus the dollar, reversing a gain of Sh118 million recorded in 2018 when the shilling weakened by a similar margin of 21 percent against the US currency.
The company added that it also suffered a dip in income from its avocado export business following the effective closure of the Red Sea shipping route to Europe due to conflict in the Gulf. This forced it to move produce through the longer route around the Cape of Good Hope in South Africa, affecting quality and prices.
Profit from avocado sales, therefore, fell to Sh361 million last year, from Sh1.37 billion in 2023, wiping out the higher earnings recorded from the macadamia, forestry, and livestock units.
“The results reflect a number of challenges, including the excessive rainfall experienced in early 2024, which caused waterlogging, hampering fruit production. Consequently, fruit volumes for both Hass and Pinkerton avocados decreased by 23 percent and 19 percent, respectively,” said Managing Director Chris Flowers.
“The shilling also strengthened by 15 percent against the euro, which averaged Sh140 during the avocado export season, resulting in lower shilling revenues compared to the previous year when the euro averaged Sh162.”
Of the other product units, gross profits from the macadamia sales stood at Sh69 million, up from a loss of Sh354 million in 2023, while the forestry unit returned a profit of Sh288 million, up from Sh149 million the previous year. The livestock unit returned a profit of Sh31 million, turning around a loss of Sh13 million reported in 2023.
Kakuzi, alongside other listed agriculture firms on the Nairobi Securities Exchange, had issued profit warnings due to the adverse market conditions caused by the Middle East conflict and a stronger shilling.
Exporters usually suffer a loss of earnings when the local currency gains on those of destination markets, as this cuts the shilling equivalent of the revenue they receive upon conversion.
Tea firms also reported tough market conditions last year as a glut of the produce at the Mombasa auction depressed prices.
