Kakuzi Plc, a major agricultural company in Kenya, warned Tuesday that its full-year 2023 earnings may plunge by at least 25% compared to 2022, dragged down by significant losses in its macadamia nut business.
The company said in a profit warning announcement that its macadamia segment is now expected to post losses due to “a significant decline in demand and price in the global markets of China, Japan and the USA.”
“This anticipated drop in full year net earnings is mainly as a result of our Macadamia business which is expected to post a loss due to a significant decline in demand and price in the global markets of China, Japan and the USA,” the company’s announcement said.
At the same time, Kakuzi said its other crops like avocados are still performing well and it expects “a strong performance” from avocados. But that won’t make up for the hit from collapsing macadamia prices and demand.
The steep profit warning comes even after Kakuzi reported a 65% plunge in first-half 2023 earnings compared to a year earlier. Net profit crashed 66% to KES 117.5 million.
The number of Kenyan companies issuing profit warnings has reached 10, after Crown Paints and WPP Scangroup joined the list of firms anticipating lower earnings this year.
Since March, Longhorn Publishers, Sasini, Car & General, Nation Media Group, Centum Investment Company, Unga Group, and Kenya Power have also warned investors to expect decreased profits. Most companies attribute the downward revisions – which could impact dividend payments – to challenging economic conditions, including rising operating costs.
With the addition of Crown Paints and WPP Scangroup, there are now 10 listed Kenyan companies that have warned of lower profits in 2023.
