Agricultural agency Limuru Tea #ticker:LIMT expects its web revenue for 2020 to say no by at the very least 25 per cent, citing challenges heightened by the pandemic.
In a discover to shareholders on Thursday, the Nairobi Securities Trade-listed agency stated enterprise was weighed down by low tea costs and rising price of manufacturing amid Covid-19 financial disruptions.
Limuru Tea posted a Sh1.9 million after-tax revenue in 2019, a drop from Sh2.5 million it made in 2018 after bouncing again from a loss-making streak.
“The corporate’s efficiency is anticipated to document a decline within the web income attributable to the shareholders of the corporate for the monetary 12 months ended December 31, 2020 as in contrast with the audited monetary outcomes for the 12 months ended December 31, 2019.
“The Board is of the view that the estimated lower within the outcomes for the interval is principally as a result of decrease tea market costs that have been realised in 2020 in comparison with 2019 within the midst of rising price of manufacturing and the prevailing international downturn on account of Covid-19,” the corporate stated.
Limuru Tea is an outgrower for Unilever Tea Kenya and owns 282 acres of tea plantations in Limuru.
Harsh climate together with lowered rainfall in 2019 decimated the corporate’s yields resulting in lowered manufacturing of tea from 493 million kilograms in 2018 to 459 million kilograms.
Final month, the Kenya Tea Growth Authority (KTDA) stated surplus provide of tea on the worldwide market, far outstripping its demand had pushed native costs down for the third 12 months operating.
Nonetheless, the commodity nonetheless earned Kenya more cash in 2020 than within the earlier 12 months, with information from the Central Financial institution of Kenya displaying that tea export earnings stood at Sh134.3 billion in 2020, representing a ten per cent enhance from the Sh122.04 billion the beverage fetched in 2019.
Kenya is the world’s greatest exporter of black tea however international gross sales have been declining as shoppers shift to natural drinks.