Manufacturer Unga Group Plc has narrowed its loss for the year ended June 2024 to Sh669.5 million from Sh959.3 million previously, on lower costs.
The firm has attributed the lower costs to improved efficiencies in its operations and a one-off foreign exchange gain as the Kenyan shilling strengthened in the first half of 2024, reducing its finance costs.
“Despite facing difficulties with the quality of maize grain due to heavy rains impacting the harvest season at the end of the first half of the financial year, we achieved a 37 percent decrease in operating loss compared to the previous year. This was made possible by our increased commercial activities, operational efficiencies, and a stronger Kenya shilling in the latter half of the financial year,” the company said in a trading statement on Friday.
Unga’s finance costs fell to Sh559.4 million from Sh784.3 million last year, underlining the lower loss for the period.
However, the manufacturer’s revenues dipped slightly to Sh23.7 billion from Sh24 billion as the company slashed product prices to incentivise customer sales.
“Volumes increased by five percent driven by product quality consistency and enhanced customer experience in the provision of our products. We made a strategic decision to lower selling prices in response to reduced raw material costs, thus allowing us to pass the savings to our customers,” Unga added.
The manufacturer has forecast a challenging operating environment in the new financial year, attributed to the disruption of global supply chains caused by evolving geopolitical tensions.
The firm is, however, betting on a stable supply of raw materials and a stable Kenyan shilling to provide resilience in the face of economic headwinds.
Unga 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, brands building and delivering quality products to customers to remain agile in an increasingly challenging environment.
The headwinds facing Unga have been reflected in its share price at the Nairobi Securities Exchange (NSE), where the stock has been largely unchanged at Sh16.95 on Thursday from Sh16.85 at the end of 2023.
The 0.6 percent rise in the counter trails the average year-to-date return from the stock market represented by the NSE all-share index at 16.2 percent.
