Unga Group will not be paying a dividend despite growing its half-year profits by more than six-fold, with management holding onto the cash to sustain its recovery trajectory.
The listed animal and human food processor posted Sh523.1 million in net profit for the six-month period ended December 2025, up from Sh82.1 million a year earlier.
The firm is retaining the profits as it rebuilds its working capital that was eaten up by losses in prior years. Unga started posting profits at the end of 2024 after two years of losses accumulating to Sh1.6 billion.
“Although the group delivered improved financial performance during the half-year, the directors do not recommend the declaration of a dividend,” Unga said.
"This position reflects the need to conserve cash and rebuild the group’s working capital which had been eroded by losses incurred in prior years.”
Higher revenues accompanied by lower operational expenses and financing costs were key contributors to the profit growth.
Sales grew by 11.9 percent in the six months to Sh14.4 billion which it attributed to its strong brand. Its operating profit more than doubled, to Sh746.7 million from Sh351.8 million, signalling higher operational efficiency.
Unga also slashed its financing costs by more than half to Sh106 million from Sh225 million a year earlier signalling the benefits of relying more on self-generated cash to drive operations as opposed to debt.
The company disclosed it had installed a biomass plant for generation of its power in an effort to cut its operating costs further.
“The group completed the installation of a biomass plant at the Nairobi feed site. This investment will help reduce energy costs while significantly lowering our environmental footprint, a key step forward in our sustainability journey,” the company said.
Unga’s share price at the Nairobi Securities Exchange rallied further after the announcement of the half-year results to hit a high of Sh30.7.
The stock is however still trading below its peak of Sh45.7 recorded in 2015.
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