Sasini Makes Sh349 Million Profit

Plantation firm Sasini Tea and Coffee has recorded massive profit after a huge loss last year.

Pretax profit for the year ended September 30 rose to Sh349.4 million from a Sh524.8 million loss at the end of last year.

The company growth was slowed down by drought at the end of last year.

However, the company recovered with the return of rain at the end of February and improved tea prices.

The effect of the drought on coffee was, however, severe, resulting in lower production.

Although the price was satisfactory, the company said the coffee segment ended the year with losses.

"However, the coffee bushes are now carrying a heavy and healthy crop, which bodes well for the coming financial year," Sasini Managing Director Peter Muthoka told reporters in Nairobi yesterday.

At the same time, the company announced a bonus share issue and a share split. The company would issue a bonus share for every five held.

Directors have recommended the capitalisation of Sh38 million out of the company's retained earnings by issuing 7.6 million bonus shares.

The bonus shares would be issued to holders of Sasini shares at the close of business on February 14.

To make its shares affordable, the board also proposes to split the company's share into five shares.

At the Nairobi Stock Exchange, the share has gained nearly Sh150 from Sh27.75 in June to Sh177 on Monday.

The company's annual general meeting to be held at Kamundu Estate in Kiambu on February 23, is expected to approve the board's recommendations.

During the year, the company's turnover increased by 36.2 per cent to Sh1.2 billion from Sh931 million last year.

Final dividend

In October, Sasini paid Sh1 a share as interim dividend, but directors have not recommended the payment of a final dividend.

Its dairy and horticulture sectors have remained profitable during the year.

The company said the value addition initiative in tea and coffee is proceeding satisfactorily, as is the range of branded Sasini tea and coffee for the retail sector launched in July.

Mr Muthoka said the company now earns 10 times more for each unit by selling packaged tea and coffee than bulk selling.