Listed Agricultural company, Kakuzi PLC, has reported a pre-tax loss of KSh 167 million for 2024, driven by adverse weather conditions, foreign currency fluctuations, and geopolitical instability in the Middle East, which hampered trade logistics for its key avocado exports.
The agricultural company, known for its avocado, macadamia, and tea exports, saw sales decline to KSh 4.79 billion from KSh 5.40 billion the previous year.The depreciation in revenue coincided with a KSh 537.17 million loss before tax, a sharp contrast from a profit of KSh 372.17 million in 2023.Kakuzi’s cash balance shrank to KSh 1.1 billion from KSh 1.40 billion in 2023, with negative cash flow from operations amounting to KSh 178.63 million.
Managing Director Chris Flowers attributed the downturn to the weakening of the Kenyan Shilling against the Euro and the tightening currency controls in Kakuzi‘s primary export markets. The Shilling depreciated 15% against the Euro, amplifying the firm’s exposure to adverse forex impacts.
“Whilst we hope that the geopolitical tension in the Middle East will ease, we must plan to continue with the rerouted logistics in 2025, and Kakuzi is doing all it can to focus on delivering quality products to the Company’s customers,” Flowers said.
To alleviate future risks, Kakuzi has activated various strategies to adapt to the new market dynamics. The company is also exploring alternative markets beyond Europe, including the U.S., which consumed 1.3 million metric tons of avocados in 2024, compared to Europe’s 0.9 million metric tons. Kakuzi will also invest in Agricultural Technology (AgTech) solutions aimed at maximizing yields and improving efficiency.
“Our focus is to reduce reliance on Europe and expand to North America, given the region’s significant avocado demand. China and India have potential, but they remain relatively less lucrative than Europe,” said Kakuzi Chairman Nicholas Ng’ang’a.
Despite the losses, the board has recommended a final dividend of KSh 5 per share, maintaining shareholder returns amid challenging conditions.