Companies

Kapchorua Tea issues profit warning on rising expenses

tea

Lower revenues have been blamed on rising labour costs and the lower prices fetched during the period. FILE PHOTO | NMG

Agricultural company Kapchorua Tea has signalled deeper losses as it expects a profit drop of at least 25 percent for its financial year ending March 31.

The Nairobi Securities Exchange-listed firm anticipates the decline after posting Sh76.5 million net losses for the year to September 2018.

“The anticipated decline in full year’s profit is attributed in part to uneven and unpredictable weather patterns but more so to the inability to control the aggressive and rising labour costs and the lower prices fetched during the period as a result of the market forces of supply and demand,” said the notice signed by its chairman E.N.K. Wanjama.

Kapchorua’s after-tax half year loss widened more than five times from 2017’s loss of Sh14.5 million during a similar period as tea prices remained depressed and operating expenses increased.

Kapchorua increased its half year turnover by 28.6 percent to Sh724 million compared to a similar period the previous year.