Kakuzi #ticker:KUKZ has posted a 9 percent decline in net profit for the half year to June of Sh245.58 million down from Sh270.45 million over lower revenues from tea.
The company says it also posted lower valuation due to reduced unharvested avocado crop.
The firm’s revenue from tea declined in the half year to June due to lower production and a weak market while macadamia results improved as a result of increased production and firmer prices.
The results were also impacted by the write back of provisions made in prior years, amounting to Sh103.2 million.
“While there was an increase in revenue from avocado sales, lower volumes of unharvested avocado crop resulted in a reduction in the fair value adjustment compared to the prior period,” the firm said in a notice.
The sale and export of avocado is the main income stream for the agricultural company, which says the impact of reduced volumes in comparison to 2018 will be unknown until later in the year.
Sale of Kakuzi’s avocadoes has begun in earnest as the market prices look to improve over last year.
Focus on avocado production has increased following a deal brokered by President Uhuru Kenyatta to open up the Chinese market this year.
Last year South Africa also re-opened its market to Kenya’s avocado exports, ending a more than 10-year standoff that began over quality concerns, thus creating a new market for the produce.
Kenya is Africa’s second largest producer of avocado behind South Africa, with thousands of coffee farmers turning to planting the fruit trees.