KENYA – Unga Group Plc, the only publicly listed miller on the Nairobi Securities Exchange (NSE), has reported a deepened net loss of KES 669.58 million (US$ 4.54 million) for the full financial year ending June 30, 2024.
This marks a continued financial downturn for the company despite efforts to offset operational challenges in a volatile economic landscape.
The miller attributed the ongoing losses to evolving domestic monetary policies, exchange rate fluctuations, and rising production costs.
However, the latest figure reflects an improvement from the previous year, when the company recorded a net loss of KES 959.38 million (US$6.51 million) in 2023. In 2022, the firm reported a loss of KES 311.36 million (US$ 2.11 million), underscoring its prolonged financial struggles.
The company’s revenue for 2024 dropped slightly to KES 23.7 billion (US$160.8 million) from KES 24.05 billion (US$ 163.2 million) in 2023. The Board of Directors attributed this 1.4% decrease to persistently high interest rates throughout the year.
The loss before tax showed a marked improvement, decreasing to KES 804.95 million (US$5.46 million) in 2024 from KES 1.2 billion (US$8.15 million) in 2023.
Operational challenges
The company faced disruptions in maize grain supply due to heavy rains, which affected the quality of harvests during the first half of the financial year.
Despite this, Unga Limited reported a 37% reduction in operating losses, which stood at KES 275.6 million (US$1.87 million), down from KES 440.58 million (US$2.99 million) in the previous year.
According to the company, this improvement was driven by increased commercial activities, operational efficiencies, and the strengthening of the Kenyan Shilling in the latter half of the financial year.
Finance costs also saw a significant decline, dropping to KES 559.41 million (US$ 3.79 million) in 2024 from KES 784.37 million (USD 5.31 million) in 2023, indicating more prudent financial management.
Additionally, the company’s basic and diluted loss per share improved from KES 8.41 (US$0.057) in 2023 to KES 5.94 (US$0.04) in 2024.
Despite the challenging environment, Unga Limited achieved a 5% increase in product volumes, driven by enhanced customer experience and consistent product quality.
The company highlighted its strengthened relationships with farmers and industry partners, a factor that bolstered consumer trust and improved farmer productivity.
“Our commitment to exceptional food and feed products continues to yield positive results,” the company stated, while acknowledging the broader macroeconomic challenges.
Looking ahead, Unga Limited remains cautious. The miller warned that geopolitical tensions will likely continue disrupting global supply chains, making raw material procurement unpredictable.
Additionally, the company foresees continued economic volatility, with potential risks related to interest rates, credit access, and currency fluctuations.
“We anticipate a challenging business environment in 2024/25. A stable supply of raw materials and a stable Kenyan Shilling will be crucial in maintaining operations,” Unga Group said.
In response to reduced raw material costs, Unga Limited made the strategic decision to lower selling prices, passing savings on to consumers. This move is part of the company’s long-term approach to improving its market position amidst rising competition in the milling sector.
Sustainability Initiatives, future plans
Despite the downturn in its financial report, Unga Limited continues to prioritize energy efficiency, aligning with its sustainability agenda. The company has installed solar power systems at its facilities, contributing to lower energy costs and enhancing its environmental stewardship.
The company emphasized its ongoing focus on improving customer experience, brand building, and delivering high-quality products that meet stringent safety standards.
According to the giant miller, the Kenyan government has introduced measures to stabilize maize prices, but recovery remains slow due to persistent challenges in the sector.
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