Unga Group reports 10.4% decline in revenue for the year ended June 2019

KENYA – Unga Group Limited, a Kenyan-based holding company with investments in flour milling and manufacturing of human nutrition products and animal feeds has reported a 10.4% decrease in revenue to Ksh17.9 billion (US$172m) for the year ended 30th June 2019 from the previous year’s Ksh19.98 billion (US$192m).

The Nairobi Stock Exchange listed firm’s finance costs went up by 83.7% to Ksh166.75 million (US$1.6m) as increased raw material costs was absorbed by the animal nutrition business thus constraining margins while supporting volume.

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The profit for the year decreased by 30% to Ksh544.81 million (US$5.2m) mainly attributed to increased competition mostly in the human nutrition business.

Due to the decrease in profit, the company’s Earnings Per Share decreased by 32.7% to Ksh4.52 from Ksh6.72.

The Group’s board recommended the fist and final dividend of Ksh0.50 per share to be paid on or about 15th January 2020 to the shareholders who will be registered in the books of the company at the close of business on 5th December 2019.

The firm also announced that its new wheat mill in Eldoret in western Kenya increased its capacity and further improved production efficiencies.

The bakery business recorded a reduction of 16% in revenues attributed to the credit risk challenges in the retail sector.

The Seaboard-backed grain miller commissioned a new state-of-the art wheat milling plant in Eldoret with a 300-tonne daily milling capacity and a storage silo with a capacity of 15,000 tonnes in a bid to grow its production capacity.

Commissioned in mid-December last year, the Eldoret plant is expected to double the millers’ current production capacity and further rise competition in the sector.

They also unveiled plans of setting up a soya meal production line in its Nairobi plant as it seeks to grow its investments in the grains and milling sector.

‘’The company will be installing a soya meal production facility at the Dakar Road plant during the course of the 2018/19 financial year,” the firm said in a statement.

Unga chief executive Nick Hutchinson said the new plant will help reduce expenses through efficiency and lower wage bills.

“This is a state-of-the-art machine that will be more economical to run and efficient on production, it is going to cut down on our expenses,” noted the CEO in a statement last year.

Last year Unga reported a profitable year ended June 2018 after discontinuation of firm’s operations in Uganda, cutting some of the losses experienced in the previous year.

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