NAIROBI, KENYA, NOVEMBER 26 — Williamson Tea Kenya (Plc) has reported a Ksh85.1 million half-year loss for the period ended September 2018 as increased quantities of tea available for sale depressed the prices.
The Nairobi Securities Exchange (NSE) listed firm has sunk into losses after a positive performance last year when it reported a Ksh43.4 million profit.
During the period, the company’s turnover increased 11.8 per cent to Ksh1.9 billion from Ksh1.7 billion, with tea production increasing on favourable weather conditions.
“Tea production was broadly in line with our estimates and generally favourable weather conditions,” the firm reported in its half-year unaudited financial results.
During the period, Mombasa auction prices declined by between 15 per cent and 20 per cent affecting earnings in the sector.
The firm has also been navigating through wage negotiations from the year 2016, which are yet to be concluded, therefore adding uncertainty to the already high cost of doing business.
Williamson Tea’s operating profit fell to Ksh16.8 million from Ksh27.7 million, a 39.4 per cent drop.
The company’s assets closed the period at Ksh8.9 billion, a 6.7 per cent drop from Ksh9.5 billion it had a similar period last year.
Property, plant and equipment were valued at Ksh3.8 billion, dropping from Ksh3.9 billion last year.
Cash generated from operations however grew significantly from Ksh195.4 million to Ksh1.1 billion.
The company equally paid a higher tax of Ksh455 million compared to Ksh7.4 million paid during a similar period last year.
Spending on purchase of plant and equipment increased to Ksh105 million from Ksh65.6 million while purchase of intangible assets took Ksh1.2 million.
Investing activities consumed Ksh100.9 million up from Ksh88.5 million while financing activities consumed Ksh29.8 million down from Ksh209.5 million last year.
This includes asset finance loans repaid and dividends paid to shareholders.
The firm is uncertain of a string performance going forward as the market trends are likely to remain constant as witnessed in the first half.
“The amount of tea on offer remains high and unless this situation alters and less supply materializes, we do not envisage much change to demand.The future therefore remains unpredictable with the advantage on the buying side as we approach the last quarter,” the company reported in the statement through the NSE.