Agricultural firm Kakuzi has retained a Sh24 per share dividend despite a 46 percent drop in net profit to Sh453.5 million for the year ended December 2023 on lower macadamia earnings due to reduced global demand.
The company said that its macadamia business posted a net loss of Sh241.8 million in 2023 from a net profit of Sh439.6 million in 2022. Its bottom line was hurt by a 47 percent rise in cost of sales to Sh3.56 billion.
Total sales rose to Sh5.4 billion from Sh4.43 billion in 2022, helped partly by a depreciating shilling, which increased the value of dollar and euro-based revenue.
Despite the profit fall, Kakuzi retained its annual dividend at Sh24 per share, translating into a total payout of Sh470.4 million. The lower profit means that the company will dig into its retained earnings which stood at Sh5.33 billion at the end of 2023 to fund part of the dividend.
If approved by shareholders, the dividend will be paid on June 15 to those on the company’s register as at May 31. Based on the company’s closing share price of Sh374.75 on Tuesday, the dividend represents a yield of 6.4 percent.
“Macadamia production in the year was 737 tonnes with sales volumes increasing from 2022 levels to 563 tonnes at an average price of $7.21 per kilogramme. This was approximately half the previous year's value, where prices averaged $15.33,” said Kakuzi in its financials.
“For avocados, as a result of increased field production, enhanced pack house and related handling efficiencies, exports surpassed the three million carton mark for the first time. This equates to 562 containers which sold with an average price for Hass of Euro 7.65 per carton (2022: Euro 7.95).”
Falling demand for macadamia in Europe and the US from the fourth quarter of 2022 due to inflation affected prices for most of 2023. Although demand picked up from the end of 2023 in Europe and China, prices remained low as producers sought to clear accumulated stock of the nut.
