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Packaging firm SKL issues profit warning on debt load
Shri Krishana Overseas (SKL) Limited Managing Director Sonvir Singh makes his remarks during the listing of SKL Limited at the Nairobi Securities Exchange’s (NSE) Small and Medium Enterprises (SME) Market Segment on July 24, 2025.
Photo credit: Francis Nderitu | Nation Media Group
Recently listed packaging materials manufacturer, Shri Krishana Overseas Limited (SKL), has issued a profit warning for its full year after it recorded a 70.4 percent drop in earnings in the six months ended June 30.
SKL reported a net profit of Sh2 million in the half year period, down from Sh6.8 million a year earlier. The drop was attributed to a 53.5 percent jump in finance costs following an uptake of new loans. The finance costs jumped to Sh15.8 million from Sh10.3 million.
The company’s borrowings rose from Sh3.5 million to Sh113 million, with SKL stating that finance costs of the debt will see its full-year profit decline by more than 25 percent.
“Profits did drop to Sh2 million from Sh6 million as a result of an increase in finance costs incurred from additional borrowing, which was sourced to fund development of the Kisaju project,” said SKL in a statement.
“Full year profits are also expected to drop by more than 25 percent because of costs of the borrowing that was secured to fund the Kisaju development,” added the firm.
In the six months to June, SKL’s revenues declined 5.8 percent to Sh158.6 million from Sh168.4 million.
Its operating costs dropped 9 percent to Sh29.9 million from Sh32.6 million, signalling cost cutting by the manufacturing firm.
Besides the investment in the new project, the company acquired machinery to help increase its production capacity.
SKL is working to increase its annual production capacity to 22,000 tonnes from the current 3,000 tonnes to feed increased demand for packaging materials especially in the horticulture and fast moving consumer goods sectors.
“The facility, whose first phase is expected to be operational by the end of 2025, marks a major step in SKL’s expansion strategy. Civil works are on track for completion by November 2025, with full production targeted by the first quarter of 2026,” said the manufacturer.
SKL listed on the Nairobi Securities Exchange in late July, ending a five-year listing drought at the bourse.
The company's shares, which listed at a price of Sh5.9, have gained 39.3 percent to trade at Sh8.22 on Friday.
