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Eaagads half year net loss doubles to Sh47 million

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A woman picking ripe coffee beans. FILE PHOTO | NMG 

Listed coffee trade firm Eaagads’ #ticker:EGAD after-tax loss for the first six months ended September 2018 has widened by 118 per cent to Sh46.55 million, becoming the third agricultural firm to post losses.

The company’s performance is as a result of reduced revenue and increased costs, condemning it to the loss zone like Williamson Tea #ticker:WTK and its affiliate Kapchorua Tea #ticker:KAPC.

Eaagads’ sales revenues dipped by 19 per cent to Sh35.9 million from last year’s Sh44.7 million owing to reduced coffee volumes offered for sale.

While in six months of 2017 the firm had offered 162 tonnes for sale, it only put out 96 tonnes in half year of 2018.

‘The higher coffee volumes offered for sale in 2017 was primarily as a result of much coffee opening stock in 2017 amounting to 111 tonnes compared to 10 tonnes at the beginning of 2018,” explained the firm Tuesday.

Costs of production rose by 11 per cent from Sh57.8 million to Sh63.98 million, further eating into the bottom-line. According to Eaagads in a commentary on the performance, this was due to outbreak of coffee berry disease that forced it to put in additional measures.

“This increased cost is expected to be overshadowed by improved crop production and hence revenues in the second half of the year,” says the firm.

The coffee trade firm adds that early crop production has increased by 14.4 per cent to 121 tonnes thanks to good rains and improved crop management. Sales prices for coffee have also improved from $2.6 (Sh266) per kilo for corresponding period to $3.3 (Sh338) per kilo in the period under review.

“Late crop pickings have exceeded budgeted expectations to date and the total 2018/2019 production is expected to be more than double that of the previous financial year,” says optimistic board.

The board explains that it will ensure timely harvesting and processing of coffee to safeguard quality and maximise on the good weather.

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