Kenyan firm Sasini bounces back to profitability despite decline in half year revenue

KENYA – Sasini, a Kenyan agricultural firm that produces and exports tea, coffee, macadamia and avocado has bounced back to profitability, posting a net profit of Ksh.122million (US$1.13m) in half-year period ended March 31 2021, a recovery from a Ksh13 million (US$121,000) loss attained in the same period last year.

The firm, according to reports by Citizen Kenya, attributes the improved performance to gains from non-sales income, with the group ‘s operating activities yielding in gains of Ksh.177.9 million (US$1.66m) from a loss of Ksh.7.3 million (US$68,000) previously.

The growth in other income offset plateaued revenues which were flat at Ksh.2.024 billion (US$18.88m) a 2% dip from Ksh.2.070 billion (US$19.3m) in March 2020, affected in part by disruptions from the COVID-19 pandemic.

“Coffee and tea production volumes were within expectations, but the global slowdown of the macadamia business and the late start of the avocado season meant the six months results relied heavily on the tea and coffee businesses,” Sasini stated.

ADVERT

Despite depending on Kenya’s main two cash crops, the period registered a decline in tea prices and low demand for both tea and coffee, as the world market continued to battle with the pandemic.

Sasini’s half year revenue declined by 2% to US$18.88m

The company however noted that it mechanized its operations especially in tea harvesting which significantly reduced its costs as it cut almost 1,364 staff in 2020.

“Despite disruptions in the supply chain, reduced demand and the depreciation of the local currency we were able to remain resilient leading to this improved performance,” said the firm.

Sasini is optimistic about the second half of the year as avocado export season began in April and increased shipment of macadamia nuts are expected to boost the company’s revenue in the remaining six months of the year.

In addition, the company is counting on the prevailing good weather and improved tea prices to deliver good financial results at the end of the year.

Sasini revamps business to grow market share

Sasini has introduced new packaging for its products to enable them stand out and drive purchase decision making by customers.

The move was triggered by the firm’s quest of matching the quality of the product inside with consumer perception at first glance.

Though the bulk of its business is in the export market, the firm has several brands that are sold locally through its Sasini Retail Division which include Sasini Gold Tea (Pure Grade Highland Tea), Sasini Classic Tea (Fine Blended Highland Tea), Sasini Premium Tea, Sasini Instant Coffee, Sasini Kahawa Kamili (Ground Coffee) and Sasini Kahawa Number 1.

Other than upgrading the packaging, the company is revamping its retail business in a bid to promote consumption of the country’s leading export commodities.

To this end, the processing company is availing its products through a vast network of stores in the country i.e., grocery chains, supermarkets, independent consumer outlets, convenience stores and kiosks.

The diverse nature of these outlets gives them an opportunity to spread their products easily to the consumers they seek.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE

Related posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.