NAIROBI, KENYA, MAR 12 — Limuru Tea(Plc) has posted an after tax loss of Ksh22.1 million for the twelve months period ended December 31, on declined green tea production occasioned by drought.
The firm on Monday reported total revenues decreased 23 per cent to Ksh80 million in 2017 from Ksh104 million in 2016.
“This was attributed to the drop in the sales volumes offsetting the benefits realized from the improved prices in the market and impact of employees industrial action experienced during the year which impacted the volume of leaf realized,” Chairman Richard Korir said in a statement.
The company has attributed the increase in loss compared to the prior year to decrease in turn over and inflationary pressures on costs.
The company recorded a Ksh19.1 million loss in 2016.
In 2017, the company produced 2.04 million kilogrammes of green tea which in turn was manufactured into 469,609 kilogramme of black tea.
This was a 35 per cent decrease in green tea volume produced compared to 2016 on account of the prolonged drought experienced in the East of Rift Valley, where the public listed company is located.
The Nairobi Securities Exchange listed firm however expects improvement in crop yield with the increased rainfall that started at the end of February.
Auction prices have also remained steady while the Kenya Shilling has shown indications of strengthening against the US dollar, factors that could boost the company’s earnings.
Korir noted that 2018 had started with a slow pace due to the dry weather experienced in the first two months of the year suppressing the crop volumes.
“If the improved weather conditions continue into the second quarter of the year and the market remains steady together with the cost management initiatives the business is undertaking, the full year results are expected to be better than those of the last year,” he said.
The company directors have not recommended the payment of a dividend.