Limuru Tea profit tumbles in 2013 on slide in asset, auction values
25 March 2014, 09:45
Nairobi - Limuru Tea on Monday reported a 72 percent plunge in full-year pretax profit on lower valuations of some of its assets and weaker auction prices, mirroring weakening earnings in the sector.
Kenya is the world's leading black tea exporter, and the crop is a major foreign exchange earner in east Africa's largest economy alongside horticulture and tourism.
Limuru Tea's pretax profit fell to 41.5 million shillings ($479,500) after the underlying assets such as the tea planted on its estates fell in value, the company said in a statement, while costs and wages rose during the year.
Limuru tea said this year had started "on a slow pace due to lower rainfall than normal", adding that if rains and market conditions improved then it should be an "average" year.
Revenues fell by 10 percent to 104 million shillings, largely due to a fall in auction prices during the year.
The company said it would pay a dividend of 7.50 shillings per share, unchanged from the previous period.
The country's tea is auctioned weekly at Mombasa, where prices have weakened this quarter.
Kenyan tea producer Kapchorua issued a profit warning on Friday, blaming a sustained fall in the commodity's price at auction.
Earlier last week, agricultural firm Kakuzi Ltd said its pretax profits halved in 2013, hurt by a steep decline in the turnover of its avocado and tea divisions. ($1 = 86.5500 Kenyan Shillings) (Reporting by James Macharia)