Agricultural firm Kakuzi Plc nearly tripled its net profit to Sh347.5 million for the first half of the year, lifted by a buoyant avocado market and recovery in the macadamia business.
In the six months to June last year, Kakuzi recorded a profit after tax of Sh117.5 million in the same period in 2023, weighed down by losses in the sales of macadamia due to a global glut in the nut.
Kakuzi Managing Director Chris Flowers said the booming international avocado market had been created mainly by subdued global supply for the popular superfood.Â
Mr Chris said that international demand for macadamia nuts has since returned to pre-Covid levels, with prices steadily growing but still trailing the 2021 levels.
The Nairobi Securities Exchange-listed firm recorded a 42 percent growth in sales of its avocado to close the half-year trading period at Sh951 million, up from Sh670 million posted within the same period, last year.
Macadamia business, which made a sectoral loss of Sh329 million in the same period last year, made a profit of Sh32 million.
“In line with our expectations, the global macadamia industry has taken a positive turn, with all markets recording a return to near normal (pre-Covid pandemic) demand levels. Global stock levels from 2023 have largely been consumed, and 2024’s production, which is currently being harvested and processed, is well-committed to the market,” Flowers said.
Nicholas Ng’ang’a, Kakuzi Plc’s board chair noted that the political situation in and around the Red Sea had forced all the major shipping lines to travel around the Cape rather than through the Suez Canal, resulting in longer transit times for Kenyan avocados.
The extended transit time, said Ng’ang’a, manifests in some quality problems. The heavy rains might also have impacted avocado growing conditions, said Flower.
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.
The glut has since eased with the earnings from macadamia improving in the review period.
