Sasini’s finance income dropped to Sh48.5 million from Sh203.5 million, leading to the larger loss.
The Nairobi Securities Exchange-listed firm earns revenues primarily in US dollars, the euro and British pound.
This means that a stronger shilling reduces the value of its sales and foreign currency holdings, a movement that is shown as a finance income or loss. The shilling traded at Sh131.13 against the dollar at the end of March 2024 and closed at Sh128.37 at the end of March.
The company is among the agricultural firms, which benefited when the shilling weakened substantially in 2023 but are now facing the opposite impact. Sasini’s sales declined marginally to Sh2.96 billion in the review period from Sh2.99 billion the year before but higher costs resulted in a bigger fall in the gross profit to Sh570.2 million from Sh626.7 million.
“The continued geopolitical tensions and continued closure of the Suez Canal have significantly disrupted the smooth flow of goods to the target markets while shipping charges have increased considerably, impacting on the cost of doing business,” said the company.
Sasini made significant reduction in administration and distribution expenses, mitigating the impact of lower sales and a decline in valuation of its plantations.
The company’s liquidity position was bolstered by borrowings of Sh2.8 billion received during the six-month period. Sasini is optimistic of improved performance in the second half of the year, citing higher prices and shipment of greater quantities of its products.
“A recovery in tea prices, a resumption in avocado and macadamia nuts shipments, and an increase in coffee trading volumes will strengthen performance in the second half,” said Sasini.
The macadamia nuts and avocado fruits seasons kicked off in March, and are expected to contribute to profitability in the second half of the year.
The company disclosed that coffee estate was the only profitable division riding on higher prices that the commodity is fetching in the international market.
Coffee prices hit a historic high of Sh859.40 in December which was nearly a 40 per cent surge driven by low production in other coffee markets.
