Unga Group Issues Profit Warning as Half Year Profit Drops 40%

Unga Group Plc has issued a profit warning as profit for the six months ended 31 December 2018 fell 40 per cent to Ksh306.3 million.

Revenue for the period declined 18 per cent to Ksh9.0 billion while operating profit declined 41 per cent to Ksh423.8 million.

The directors have also recommended that the firm should not issue an interim dividend.

“Based on the company’s unaudited financial results for the first six months ended 31 December 2018 and the company’s second-half forecast, profit for the full year is likely to be at least 25 per cent lower that prior year.

“Volumes and margins declined in the human nutrition business due to increased competition and depressed consumer demand,” company secretary W Jumba said in a statement announcing the half year results.

Unga also predicted a persistent challenge during the second half of the year ending June 2019 owing to the depressed demand for flour.

This warning comes after Seaboard Corporation unsuccessfully attempted to take over the milling company. The opposing shareholders claim that the buyout offer of Ksh40 per share undervalues the NSE-listed firm by Ksh701.5 million.