KENYA – Sasini, one of Kenya’s major tea and coffee producers, has purchased fixed-income securities valued at Sh755.6 million (US$6.09m) following improved cash generation in the year ended September 2022.
The company joins other Nairobi Securities Exchange-listed firms such as WPP Scangroup and Carbacid Investments Plc that invest their excess cash in fixed deposits and treasuries, helping them to generate supplementary income outside of their core operations.
Sasini’s securities that did not feature in the preceding financial year include Sh288.5 million placed in infrastructure bonds and Sh467.1 million in short-term bank deposits.
Long-term government bonds, for instance, have been auctioned at interest rates topping the 14 percent mark in recent sales.
The member of the Sameer Group said it is banking on its enhanced liquidity position to support the company into future profitable growth.
“Given the exceptionally strong performance during the year, the management will continue to explore new lines and new ideas in a bid to fit with the changing business environment to expand and enhance shareholder value,” Sasini said when announcing its full-year results.
“Our liquidity position is stable and firm and is well poised to support the company in driving forward and achieving profitable growth. We, however, continue to exercise prudent business decisions to mitigate negative effects and aim to continue delivering desired results in the next financial year and subsequently.”
For the year September 2022, the group posted a strong performance in both profitability and cash flow, a demonstration of resilience to the COVID-19 pandemic and macroeconomic environment, e.g., the prolonged adverse weather conditions that have crippled many companies’ performance.
The company managed to have a turnover of Kshs 7.34 billion (US$59.2m) compared to Kshs. 5.39 billion (US$43.5m) in the previous year, representing a 36.3% revenue rise. Sales rose by 23.3% to Ksh 5.54 billion against Ksh. 4.49 billion attained in the previous year.
Net profit hit Sh1.17 billion (US$9.4m) in the financial year ended September 2022, double the Sh573.2 million (US$4.6m) it posted in the preceding similar period.
A Ksh 543.4 million (US$4.4m) gain from Sh514 million (US$4.1m) the previous year, arising from changes in the fair value of biological assets, also boosted the revenues during the review period.
Commenting on its future outlook, Sasini said geopolitical risks, climate changes, economic downturns, rising inflation, and other challenges in Kenya are posing a threat to its operations.
In addition to relying on its liquidity position to drive the business to profitability, the company is also aiming its shot at sustainability and innovation.