Listed agricultural firm Kakuzi has posted a 48.5 per cent decline in profitability to Sh319 million for the year ended December 2021 on cyclic dips in productivity.
The firm announced it will make a Sh431.1 million dividend payout or Sh22 a share despite the decline in profits from Sh622 million in the previous year.
Last year Kakuzi paid out Sh352.7 million or Sh18 a share on a bumper avocado harvest that is typical followed by a small crop the following year.
The grower also said avocado prices dipped compared to the previous year hurting earnings blaming the oversupply of the fruit from Peru and Columbia which hurt selling prices during the same period when the company was also in the market.
“The year saw the group post reduced earnings due to lower avocado production and prices. This was due to the avocado orchards entering their bi-annual offseason bearing cycle which results in a large crop of avocados in one year, followed by a small crop the following year,” Kakuzi Chairman Nicholas Ng’ang’a said.
Kakuzi had issued a profit warning for the year ended December, citing reduced avocado production and lower prices of the commodity in European markets signaling a decline of more than 25 per cent in earnings.
The 48.5 per cent drop is steep considering the company said its Hass avocado production declined 18 percent in the review period compared to 2020.
The drop in production is in line with the phenomenon of a bountiful year followed by reduced output in the following year.
