Listed tea export firms reap the benefits of weak shilling

Kenya’s Williamson Tea and Kapchorua Tea, which share directors, more than doubled pretax profit for the six months to Sept. 30, helped by a weaker shilling that boosted the value of exports in local currency terms.

But they said tea prices could fall in the next six months of their financial year with expectations of a bigger harvest.

In their results statements, both firms said the onset of the “short rains” season, which usually runs October to December, “will result in favourable crops over the coming months”.

“There is bound to be a decline in current price levels which could negatively impact the second half of the financial period,” both firms said in their results statements.

Leading exporter

Kenya is the leading exporter of black tea and the crop is its top foreign exchange earner.

Kapchorua reported a pre-tax profit of 143.4 million shillings, up from 68.2 million a year earlier.

It said its results were “boosted by a weakening shilling against the trading currencies and the implementation of rigorous cost control measures”.

Williamson reported a pre-tax profit of 543.8 million, up from 240.4 million helped by higher sales volumes, as well as the impact of the weaker shilling and cost controls.

SOURCE: BUSINESS DAILY