Companies

Sasini invests Sh755m in fixed income securities

BDLSasiniProductsb

Sasini has purchased fixed income securities valued at Sh755.6 million. PHOTO | POOL

Agricultural firm Sasini has purchased fixed income securities valued at Sh755.6 million on the backdrop of improved cash generation in the year ended September 2022.

The securities which did not feature in the preceding financial year include Sh288.5 million placed in infrastructure bonds and Sh467.1 million in short-term bank deposits.

The investments saw the company’s finance income more than double to Sh134.5 million in the review period from Sh63.5 million a year earlier.

READ: Sasini posts highest profit in seven years

Sasini joins other Nairobi Securities Exchange-listed firms that park their excess cash in fixed deposits and treasuries, helping them to generate supplementary income outside of their core operations.

They include WPP Scangroup and Carbacid Investments Plc. Interest rates have been rising across various debt instruments, partly reflecting the impact of higher inflation.

Long-term government bonds, for instance, have been auctioned at interest rates topping the 14 percent mark in recent sales.

Sasini’s purchase of the fixed income securities coincided with a more than two-fold growth in cash flow generated from operations, which hit Sh1.66 billion from Sh534.2 million previously.

The grower is banking on its enhanced liquidity position to support the company into future profitable growth.

“In view of the exceptionally strong performance during the year, the management will continue to explore new lines and new ideas in a bid to fit with the changing business environment to expand and enhance shareholder value,” Sasini said last week when announcing its full-year results.

“Our liquidity position is stable and firm and is well poised to support the company in driving forward and achieving profitable growth. We however continue to exercise prudent business decisions to mitigate negative effects and aim to continue delivering desired results in the next financial year and subsequently.”

During the review period, Sasini defied a challenging macroeconomic environment which included remnant effects of the COVID-19 pandemic and prolonged adverse weather conditions to double its net profit to Sh1.2 billion from Sh573.2 million previously.

The company further faced an increased cost of doing business in the year off the back of the Russia-Ukraine conflict fallout that included higher costs for imported goods.

READ: Sasini net profit rallies to Sh421m as margins rise

Sasini recorded a turnover of Sh7.34 billion from Sh5.39 billion or by an equivalent of 36.3 percent, offsetting a 23.3 percent increase in the cost of sales to Sh5.54 billion.

[email protected]