Manufacturer Unga Group Plc narrowed its loss for the year ending June 2024 to Sh669.5 million from Sh959.3 million previously, on lower costs.
The company attributed the lower costs to improved efficiencies in its operations and one-time gains in foreign exchange with the appreciation of the Kenyan shilling in the first half of 2024, which reduced its financing costs.
“Despite the difficulties we faced with regard to the quality of corn grains due to heavy rains that affected the harvest season at the end of the first half of the fiscal year, we achieved a 37 percent reduction in operating losses compared to the previous year. The company said in a trading statement on Friday. This was made possible by our increased business activities, operational efficiencies and a stronger Kenyan Shilling in the latter half of the financial year.
Unga’s financing costs fell to Sh559.4 million from Sh784.3 million last year, confirming the lower loss during the period.
However, the manufacturer’s revenue fell slightly to Sh23.7 billion from Sh24 billion as the company reduced product prices to stimulate customer sales.
“Volumes increased by five percent driven by consistency of product quality and enhanced customer experience in sourcing our products. We have made a strategic decision to reduce selling prices in response to lower raw material costs, allowing us to pass on the savings to our customers,” Onga added.
The manufacturer expected a challenging operating environment in the new fiscal year, due to the disruption of global supply chains due to emerging geopolitical tensions.
However, the company is betting on stable supplies of raw materials and a stable Kenyan shilling to provide resilience in the face of economic headwinds.
Onga sees global economic volatility, including interest rates and currency risks, as potential downsides to growth in the short to medium term.
The manufacturer says it will focus on improving customer experience, building brands and offering high-quality products to customers to remain resilient in an increasingly challenging environment.
The headwinds facing Unga were reflected in its share price on the Nairobi Stock Exchange (NSE), with the stock largely unchanged at Sh16.95 on Thursday from Sh16.85 at the end of 2023.
The 0.6 per cent rise in the counter tracks the year-to-date average annual stock market return of which the NSE All Share Index is 16.2 per cent.
Comments are closed, but trackbacks and pingbacks are open.