Unga full-year profit hits Sh311 million on sale of bakery unit
Gains from the sale of the bakery unit have lifted Unga Group Plc full-year profit in the 12 months through June 2022 by 6.1 percent to Kes311.4 million from Kes293.5 million last year.
In the year under focus, the miller disposed of its bakery business while entering a joint venture with Nutreco to operate some of its business in Kenya and Uganda.
“Divestiture from the bakery business was completed in the first half of the financial year. Profit for the year includes gains attributable to the transfer of assets to the venture companies and the sale of property,” the company said.
Last year, Unga Group sold its high-end market bakery unit Ennsvalley Bakery Limited to BigCold Kenya Limited as the Nairobi Securities Exchange-listed company sought to cut costs and improve efficiency.
The exits saved Unga from booking a loss with the Group having returned an operating loss of Kes502 million in the year.
Financial disclosures show that the firm’s sales volumes dipped by 18 percent driven by the increase on the prices of finished goods owing to an uptick in the cost of inputs.
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“The escalation in raw material cost was attributable to global shortages, upsurge in freight cost and a weakened Kenya shilling,” the company said.
In the year under review, the supply of key raw material wheat was negatively impacted by the prevailing drought, pandemic-related supply chain interuptions, and increased demand for the grain globally amid the ongoing war between Russia and Ukraine. Russia and Ukraine account for a huge percentage of wheat supplied to world markets.
“Maize and soya were in short supply due to poor harvest in the region. Southern Africa imports helped bridge the supply gap albeit at a significantly higher price,” Unga explained.
At the moment, Kenya is experiencing one of the worst droughts in the past four decades, leaving about 4 million people in need of food assistance.
Revenues for the year edged up slightly to Kes18 billion from Kes17.8 billion last year on price adjustments to cover the increase in raw material costs.
The firm has not recommended the payment of a final dividend to shareholders.
