NAIROBI, KENYA, SEPTEMBER 28, 2018 — Listed miller Unga Group has posted an after-tax profit of Ksh783.2 million for the financial year ended June 30, 2018, bouncing back from a Ksh7.04 million loss its reported last year.
The turn-around has been pegged on last year’s closure of its Uganda Unit after three consecutive years of losses.
The firm, which is inching close to the closure of a buyout deal with American multinational Seaboard Corporation, saw its turnover increase two per cent (2%) to 19.9 billion compared to Ksh19.5 billion similar period last year.
“Discontinuation of operations at the Ugandan subsidiary shielded the Group from some of the losses suffered in the preceding year, in which investment impairment was recorded,” the management reported on Friday.
The profits came even as the Kenyan government imposed a maize subsidy programme in the first half of the year, which saw the company sell its Jogoo and Hodari brands at the same price as its competitors.
During the period, the company was also not allowed to sell Hostess, its premium maize meal, leading to the loss of loyal customers.
These caused its human nutrition business to experience mixed performance.
Slow but positive progress to regain market presence has however been made during the second half of the year, the company affirmed.
The Nairobi Securities Exchange listed company has also managed to withstand affects of Nakumatt closure which affected its Ennsvalley bakery business.
In the animal nutrition and health business, overall feed volumes increased significantly with the most categories recording positive growth.
“This was attributable to the sustained supply of competitively priced and high quality products, supported by effective sales and marketing strategies,” the company said in its financial statement.
According to the miller, availability of well-priced yellow maize ensured that farmers were able to realise a fair return on their production of meat, milk and eggs.
During the year, the company introduced new products which it says penetration efforts are ongoing. The products include Fugo tilapia fish feeds which are now widely available in the market.
“The Group continues to roll-out the new strategy for Ennsvalley bakery business to recover its revenue base following closure of all in-store operations with Nakumatt;of which one element is opening new in-store counters in partnership with leading supermarket chains,” the management said.
Early this year, America’s Seaboard Corporation Limited sought regulatory approvals to acquire Unga Group Holdings.
The New York Stock Exchange listed firm, which currently has 2.29 percent stake in Unga Group, proposed a cash offer for ordinary shares in Unga Group that are currently not owned by the corporation or its affiliates.
The corporation gave Ksh40 per ordinary share offer, with the value of the deal totaling Ksh3.03 billion.
Sea Board is one of the largest United States companies engaging in pork production, processing and ocean transportation.
The firm has operations in a number of countries in Africa, working closely with companies engaged in commodity merchandising, grain processing and sugar production.