Agricultural firm Williamson Tea Kenya has sunk into losses for the full year ended March 2025 on higher operating expenses that also saw its affiliate Kapchorua Tea record a 54.6 percent decline in profits.
Williamson Tea posted a Sh166 million net loss, reversing a profit of Sh526 million a year earlier.
Meanwhile, Kapchorua Tea reported a full-year profit of Sh181 million compared to Sh399 million in a similar period last year.
The revenues of Williamson Tea declined by a marginal two percent to Sh4.1 billion, while Kapchorua’s income grew to Sh2.2 billion from Sh2.1 billion.
The companies’ gains from operations, however, dropped heavily, signalling higher operating expenses eating into the revenues.
The Nairobi Securities Exchange-listed growers had already issued profit warnings, citing depressed market prices following an oversupply of tea against demand as well as a strong shilling against the US dollar.
Despite the loss, Williamson Tea proposed a dividend of Sh10, while Kapchorua will be paying a Sh25 per share dividend.
Williamson Tea owns 39.5 percent of Kapchorua, which saw it receive Sh71 million from the associate company.
The two firms disclosed plans to capitalise a portion of their reserves by issuing bonus shares to existing shareholders.
Williamson Tea is seeking to raise Sh87.5 million by issuing 17,512640 new shares of Sh5 each to existing shareholders at a ratio of one such share for each held.
Kapchorua Tea will be raising Sh39.1 million through bonus issues at the same rate of one for each currently held.
The bonus issue follows an increase of authorised share capital by both companies made last year.
The firms are banking on the repute of their premium brands, reduction of operating expenses through the use of technology, and possible removal of trading tariffs by China to turn around their performance.
“Whilst the prospects for rain-fed agricultural businesses are always uncertain and the industry remains affected by the dynamics of supply and demand, the efforts of the government and Tea Board of Kenya to improve farmers returns combined with the potential removal of trade tariffs with China offer some hope,” said Williamson Tea.
China has disclosed that it plans to negotiate a new economic pact with Africa that will see it get rid of all tariffs charged on African goods exported to it.
