Sasini net profit rallies to Sh421m as margins rise


Workers process fruits at the Sasini avocado pack house on Mombasa Road, Nairobi. PHOTO | POOL

Agricultural firm Sasini more than tripled its net profit in the half-year ended March, helped by higher sales and lower costs.

The Nairobi Securities Exchange-listed firm made a net profit of Sh421.3 million in the review period compared to Sh122.2 million the year before.

“In view of the good performance, the directors recommend the payment of an interim dividend of Sh1 per share… payable on or about July 14 to members on the register at the close of business on June 2,” the company said.

Saini had paid an interim dividend of Sh0.5 per share a year earlier, with the doubling of the payout reflecting its growing cash reserves.

The company ended the six months with cash and cash equivalents of Sh1.1 billion, up from Sh821.9 million the year before.

Sasini’s sales grew 65.3 percent to Sh3.3 billion, driven by higher prices of tea and coffee that also reflected the impact of the weakening of the Kenya shilling. The company also benefited from higher gross margins, which nearly doubled to 16.3 percent on the back of lower operating expenses.

Sasini recently achieved full mechanisation of its tea harvesting, eliminating the costs it used to incur to pay seasonal tea pickers.

The firm did not give a breakdown of its expenses but previously noted that mechanisation of tea harvesting is a key driver in the cost-cutting measures and the improved margins.

Sasini is optimistic that the earnings momentum will carry into the second half of the year, citing expectations of higher production and stable prices for the commodities it deals in.

“The remaining six months of the year look positive with the resumption of the avocado and macadamia exports,” the company said in a statement.

“The tea prices are also expected to remain stable despite the disruptions expected from the war in Ukraine. The resumption of the rains is expected to support both the tea production volumes and the coffee early crop to achieve expected production volumes.”

Sasini is among the listed firms that have raised dividend payouts on the back of rising profitability. Banks have also resumed and expanded cash distributions to shareholders after weathering the Covid-19 pandemic to post double to triple-digit profit growth.

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