Rea Vipingo Pre-Tax Profit Hits Sh100m

Listed agribusiness firm, Rea Vipingo, has registered 14 per cent growth in its pre-tax profit to Sh100 million for six months ending March 31, 2007.

The firm's profits surged from Sh88 million in the same period last year, taking advantage of the current high sisal prices in the international market.

The profit increase defied the strengthening of the shilling that has sliced profit margins for tea, coffee and horticultural exports, prompting a strong lobby for government intervention to fix foreign exchange rates.

Demand for African sisal has been rising in the international market for non-traditional applications.

Sisal prices have surged from under $800 per tonne in 2004 to over $1000 in 2006, levels that were lastly realised in mid 1970's. The profit arising from operating activities increased to Sh44 million compared to Sh33 million in the same period last year.

The operating profit increased to Sh115 million in 2006 from Sh103 million in the period under review.

Also, the profits arising from changes in fair value of biological assets increased to Sh27 million from Sh24 million in same period in 2006.

The earnings per share (basic and diluted) increased to Sh1.17 from 95 cents but the directors did not recommend payment of interim dividend.

Plantations

The firm's turn over increased to Sh599 million from Sh575 million.

Rea Vipingo has sisal plantations in Kenya and Tanzania and is involved in cultivation, manufacture, spinning and export of sisal fibre and sisal products.

The spinning mill in Tanga produces 16,000 tonnes of sisal fibre, making it the top producer in Africa. Among the products are fine yarns, baler, binder, twine, ropes and general cordage.