KENYA – Kenya’s Kapchorua Tea has reported a significant 27 percent year-on-year increase in Profit after Tax (PAT), reaching Kes399.4 million (US$3.09M) from Kes314.5 million (US$2.43M) for the financial year ending March 31, 2024.
This surge was driven by increased revenues and operational gains, despite market challenges.
The firm’s revenue rose by 23.7 percent to Kes2.2 billion (US$16.99M), compared to Kes1.8 billion (US$13.9M) in the previous year. Earnings per share saw a 27 percent jump to Kes51.04 (US$0.40), while the dividend per share remained steady at Kes25 (US$0.19).
Additionally, the firm’s assets experienced double-digit growth, totaling Kes2.9 billion (US$22.4M).
Following the release of these financial results, Kapchorua Tea declared a final dividend of Kes15.00 (US$0.12), with an interim dividend of Kes10.00 (US$0.077) already paid. The book closure date is set for July 31, 2024.
“A record crop, the introduction of new technology, and the consistent hard work of management, combined with the depreciation of the Kenyan Shilling, secured pleasing results for the period despite a falling market,” noted the firm.
However, Kapchorua Tea highlighted ongoing market challenges. “Tea prices have declined to unsustainable levels in the face of market saturation and the consequences of an estimated 200 million kgs of unsold KTDA teas, while the Kenyan Shilling has also stabilized.
The destruction of all unsold KTDA teas and the removal of the auction minimum pricing system is needed to enable the market to return to a normal dynamic and for prospects to improve,” added the company.
In a joint statement, Kapchorua Tea and Williamson Tea emphasized the necessity of destroying unsold KTDA teas to save Kenya’s tea industry from being overwhelmed by excess supplies, which have depressed prices.
This announcement coincides with Kenya’s recent allocation of KSh 1 billion to construct two value addition and branding centers for Kenyan tea.
President William Ruto directed the Kenya Tea Development Agency (KTDA) to establish Common User Facilities (CUF) in Kericho and Nairobi.
These centers aim to enhance the value addition and branding of locally manufactured tea products, serving the Western Rift and Eastern Rift tea-growing regions, respectively.
Additionally, Kenya exported its first batch of tea consignment to China following the launch of the China-Kenya Tea Trade Centre in Fujian Province.
According to the Tea Board of Kenya (TBK), it is expected that by the end of the year, one million kilograms of Orthodox teas will have been shipped to China under this arrangement.
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