KENYA – Williamson Tea Kenya and one of its associate farms, Kapchorua Tea Kenya narrowed their losses in the half year ended September and issued pessimistic forecasts for the full year ending March 2020.
According to a report by the Business Daily, Williamson’s net loss in the review period stood at Sh65.8 million (US$0.64m), dropping 22.5 percent from Sh85 million (US$0.82m) a year earlier.
The company’s sales declined by a third to Sh1.3 billion (US$12.65m) from Sh1.9 billion (US$18.49m), indicating that lower costs helped to reduce the loss.
The Nairobi Securities Exchange-listed firm did not disclose its cost structure.
Kapchorua on the other hand slashed its net loss 80.2 percent to Sh15 million (US$0.14m) from Sh76.4 million (US$0.74m).
The farm which produces English Breakfast Tea bags and Black Tea with apple spices tea saw it sales dropped 46.3 percent to Sh388.2 million (US$3.77m) from Sh724 million (US$7.04m), signalling that the company cut its costs aggressively to shrink the loss.
Besides their output falling 15 percent, the companies also suffered from low selling prices as rival producers brought their surplus stocks to the market.
“We do not envisage much change going forward and it is unlikely we will make up our crop deficits in the months to March 2020 or that prices will rise. A regrettably gloomy but unfortunately realistic picture,” the company stated.
Both companies are controlled by London-based institutional investor Ngong Tea Holdings.
Other farms operated by Williamson Tea include Kaimosi tea farms producing the Earl grey tea bags and Elephant grey tea.
Its other farm is Tinderet farm known for its Snow globle and Traditional Afternoon Loose tea caddy brands.
Williamson also operates the Changoi tea farm with a solar photovoltaic system installed, enabling it to be entirely powered by renewable energy. It is the largest solar park in East Africa.
Changoi farm’s brands include the Regal and Loose Christmas special caddy.