KENYA – Listed Kenyan flour miller Unga Group Ltd has reported a 46 per cent increase in annual pretax profit after revising down its profits for the previous year following the adoption of new accounting standards.
It said profit before tax rose to Sh567.7 million in the 12 months to June from a restated Sh389.5 million a year earlier. It previously reported pretax profit for the year to June 2013 as Sh662.2 million.
Unga said it had restated results following the adoption of the revised international accounting standards, IAS 19 that related to employee benefits.
IAS 19 Employee Benefits sets out accounting requirements for various types of benefits provided by an employer to its employees, including post-employment and termination benefits.
According to the International Accounting Standards Board, amendments to IAS 19 Employee Benefits, would provide investors and other users of financial statements with a much clearer picture of a company’s current and future obligations resulting from the provision of defined benefit plans, and how these obligations would effect a company’s financial position, financial performance and cash flows.
The amendments to IAS 19 are effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.
The firm said turnover in the year to June 2014 was Sh17.0 billion, up from a restated Sh15.14 billion in the previous 12 months.
It said its earnings per share rose to Sh6.35 shillings from Sh2.59. The board recommended a first and final dividend of Sh0.75 per share.
The announcement by Unga Group, a leading flour miller in the country comes at a time when the price of maize flour has dropped by an average of Sh6 following release of half a million bags of grains from the strategic food reserves.
Retailers have cut the price of the two-kilogramme packet to an average of Sh112 from Sh118, easing inflationary pressure.
This comes weeks after the National Cereals and Produce Board (NCPB) released 500,000 bags of maize to the millers at below market prices as part of efforts to cool down runaway flour and grain prices.
Unga Group Limited has two business segments, namely Consumer, and Animal Nutrition and Health. The Consumer segment produces products for human consumption.
The Animal Nutrition and Health segment produces animal feed and mineral supplement products, and distributes products for animal health.
The Company, through its subsidiaries, is engaged in the milling of wheat and maize, and the manufacture of packaging materials and animal nutrition products.
Maize prices have a big effect on inflation in Kenya where it is the staple food and accounts for a significant share of poor households’ budget.