NAIROBI: Sasini limited has reported a profit after tax of 649.4 million shillings for the year ended 31st July 2015 compared to 65.3 million shillings in the same period last year.
The increase in profit has been attributed to higher tea prices and successful sales of non-performing assets in the second half. Sasini has declared an interim dividend payout of 1 shilling per share payable less withholding tax.
The company attributes the increase to the improvement of tea prices and disposal of non-performing assets in the second half. The non-performing assets which included the Wahenya estate and part of Mweiga estate have been making losses for the last six years.
The sale was part of the management strategy to use the money for investment in more productive divisions of the company.
For the year under review, valuations of its freehold land rose by Sh4.3 billion which subsequently pushed up its total assets to Sh13.6 billion, up from Sh7.8 billion or a 74 per cent jump.
The firm however says that the year has been characterized by a biting drought that severely affected the operations of the company.
The poor rainfall over the year adversely affected production volumes of coffee while increasing the cost of production through increased irrigation intervals. The board declared an interim dividend of 1.00shs per share payable less withholding tax
Tea prices have been fluctuating due to over-supply in the industry, changing consumer trends, political instability in major tea export destination countries, slow economic growth in the Eurozone and aggressive expansion of Tea bushes in Vietnam which has grown her exports to Pakistan by 60%.
Tea prices at the Mombasa auction dropped slightly this month after hitting new highs last month. A kilogramme of made tea dropped to sell at Sh309 from Sh312 in the previous trade.
