Kakuzi Plc has disclosed a substantial decline in its half-year profits for 2023. The company experienced a staggering 66% drop, resulting in a net profit of KSh 117.5 million. This significant decrease raises concerns about the overall financial health of the company and its ability to meet investor expectations. 

Kakuzi’s significant profit decline, positioning it as the ninth firm on the Nairobi Securities Exchange to issue a profit warning, reflects a broader trend in the industry. 

This aligns with other notable entities, including Longhorn Publishers, Sasini, Car & General, Nation Media Group, Centum Investment Company, Unga Group, and Kenya Power, all issuing profit warnings since March.

Kakuzi Plc has reported a substantial decline in its half-year profits, with net earnings plummeting to KSh 117.5 million, a sharp contrast to the KSh 341.3 million recorded in the corresponding period in 2022. 

This marked decrease extends to the pre-tax profit, which saw a 65% drop from KSh 494.7 million in 2022 to KSh 171.1 million in the current financial period. The company attributes this significant downturn to a global macadamia glut, resulting in a sectoral loss of KSh 329 million in its macadamia business. 

Kakuzi Plc has issued a stark warning of an anticipated drop of at least 25% in its full-year net earnings for 2023. The company foresees a challenging financial outlook, projecting a loss attributed to a substantial decline in both demand and prices in the global markets.

Kakuzi’s macadamia business confronts formidable challenges, grappling with the staggering loss of KSh 329 million. The global macadamia market, characterized by a glut, has triggered a drastic reduction in both prices and demand for these nuts. 

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The significance of China, Japan, and the USA as kakuzi’s primary markets amplifies the repercussions of the prevailing market conditions, where quality macadamia nut kernels are fetching less than half the prices recorded in the same period last year.

Kakuzi’s recent profit warning has cascading effects on various stakeholders, including investors, employees, and the broader economy. 

For investors, the announcement signals an expectation of decreased profits, likely leading to a negative market response and a subsequent decrease in market prices, resulting in lower share returns. This downturn not only impacts individual investors but also reverberates through the broader economic landscape. 

To navigate these challenges, kakuzi plc must implement robust risk management strategies, including identifying and evaluating potential risks and developing effective mitigation plans. These proactive measures are crucial for recovery and ensuring resilience against future uncertainties in the market.

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