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Unga warns of losing a whole year due to high input costs
Friday, June 23, 2023
Unga silo Ltd. in Eldoret. file image | NMG
Listed food manufacturer Unga Group expects to post a loss for the year ending June 2023, reflecting a profit of Sh311m reported in the previous year.
The company pointed to the increase in production costs resulting from the scarcity of local raw materials, which forced it to turn to imports at high global prices.
“Based on the company’s 11-month unaudited financial results and forecast for June 2023, full-year results will be a loss, compared to prior year earnings,” the company said in a notice on Friday.
is reading: Unga expects higher input costs in the extended drought
Unga says the tough business environment has been worsened by a weak shilling and a shortage of US dollars, which has led to large foreign exchange losses and increased interest expenses.
“The scarcity of locally sourced raw materials has led to increased importation at higher world prices. This has led to higher production costs that could not be fully passed on to consumers.”
The Nairobi Stock Exchange-listed mills company posted a net loss of Sh131.3 million during the six months ending December 2022.
is reading: Unga Group is sinking Sh131.3 million in losses due to cost overruns and inflation
The company became the third listed entity to issue a profit warning in recent times after Longhorn Publishers and state-owned utility company Kenya Power.
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