Limuru Tea PLC., one of the leading tea producers in Kenya, has announced that it expects to record a sharp decline in its profit before tax for the year 2023, due to increased operational costs and a loss in biological asset valuation.
The company said in a statement that its profit before tax attributable to the shareholders would drop by more than 25% compared to the previous year, based on a preliminary review of its financial statements.
The board of directors attributed the estimated decrease to three main factors: higher industry wage rates, the depreciation of the Kenya Shilling against the US Dollar, and a projected loss in the value of its tea plants.
“The Board is of the view that the estimated decrease in the results for the period is due to increased operational costs attributed to (i) increased cost of labour driven by higher industry wage rates, (ii) the importation cost of fertilizer which was adversely impacted by the depreciation of the Kenya Shilling against the US Dollar: and (iii) a projected loss in Biological Asset valuation for the year 2023,” the statement read.
The company said that the information contained in the announcement was only based on the information currently available to the board and a preliminary evaluation of the financial statements, which were being audited and reviewed by the company’s auditors.
The company added that it would disclose the details of its financial information in the announcement of its final results for the year 2023, which was expected to be published by the end of March 2024.
The announcement was approved by the Capital Markets Authority (CMA), the regulator of the securities market in Kenya. However, the CMA said that it did not assume responsibility for the accuracy of any of the statements, opinions or reports expressed or referred to in the announcement.
Limuru Tea PLC. is a public limited company listed on the Nairobi Securities Exchange (NSE). It owns and operates a tea estate and a factory in Limuru, Kiambu County. The company produces black tea, which it sells both locally and internationally.
