Agricultural firm Sasini has posted the highest net profit in seven years on the back of increased revenues and muted costs.
Net profit hit Sh1.17 billion in the financial year ended September 2022, being double the Sh573.2 million it posted in the preceding similar period.
The latest profit marks the first time since 2015 for the Nairobi Securities Exchange-listed firm to hit a billion shillings profits as the main revenue drivers exceeded management’s expectations.
“Most of the business units performed exceptionally and beyond expectations. Notably, the main segments of tea, coffee and macadamia trading surpassed expectations,” said the firm in a results update.
“The measures devised during the year effectively produced results manifested in high-quality products and consistent quality that attracted higher sales prices resulting in increased turnover to a record high compared to previous years.”
The board has, however, opted not to declare a final dividend on this seven-year high profit. Investors will have to contend with the Sh1 per share interim dividend amounting to Sh228.05 million that was paid mid-July last year.
The firm’s top three shareholders are Legend Investments Limited (41.84 percent), Yana Towers Limited (12.6 percent) and East Africa Batteries Limited with 11.02 percent stake.
Sasini’s sales revenue grew by 36.3 percent to Sh7.34 billion compared to Sh5.39 billion in the previous year. The cost of sales increased to Sh5.54 billion against the prior year’s Sh4.49 billion.
“We managed to grow revenue at a faster pace than costs of sales which is exceptional towards profit generation,” said the firm.
Sasini has been automating its tea business and closed the financial year ended September 2021 with 2,520 employees compared to 4,656 staff it had five years earlier, helping it to contain staff costs.
A Sh543.4 million gain arising from changes in fair value of biological assets also boosted the revenues during the review period. The previous year had a Sh514 million gain.
The improved performance was despite the financial year having continued to experience the remnant effects of the Covid-19 pandemic, especially in the first half of the year before government lifted the containment measures.
The management says that the focus for the current financial year is to continue to explore business new lines and ideas to expand and enhance shareholder value.
“Emphasis on quality coupled with quantity based on a sustainable model remains top on the agenda for delivery,” said the board.