Coffee and tea grower Sasini #ticker:SASN has reported that its net profit for the year to September has dropped 41.2 per cent to Sh339.7 million on lower gains from divestitures.
Sasini, which is listed at the Nairobi Securities Exchange (NSE) #ticker:NSE, sold Savanna Coffee House in a transaction which boosted its income by Sh16.9 million in the period under review.
The firm booked a gain of Sh422.7 million from divestments in the financial year to September 2016, helping the business close with a net profit of Sh576.98 million.
Sasini’s profit drop came about despite the fact that its revenues during the period increased 17.7 per cent to Sh4.2 billion with management attributing this growth to stronger international tea prices.
The firm’s income was further positively impacted by a Sh81.7 million gain in fair valuation of its biological assets, compared to a loss of 117.9 million the previous year.
“Despite the effects of the severe weather conditions in the early part of the year, there was an improvement in tea production to 11.2 million kilogrammes against the production of 11.1 million kg the previous year,” the firm said Tuesday.
“Coffee production was 861 tonnes compared to 944 tonnes the previous year,” adding that prices of this commodity reduced slightly and remained sluggish through the year due to large stocks held by the consuming markets.
The firm’s board of directors recommended the payment of a second interim dividend of 75 cents per share held, adding to the 25 cents per share already paid out in July 2017.
This proposed payment to shareholders, which is set to take place on or about February 21, will bring the total dividend payout for the year to Sh228 million.
Disposal of Sasini Coffee House marks the latest divestiture by the firm whose principal activities are growing and processing of tea and coffee.
Sasini in 2015 sold its building on Nairobi’s Loita Street, Sasini House, for more than Sh600 million. It recently raised Sh1 billion from sale of its land in agricultural operations it says are unprofitable, recording large capital gains from the properties it bought decades ago.
These include land in its two coffee estates in Nyeri — Mweiga and Wahenya — that it said had been running losses for six consecutive years.