(Nairobi) – Williamson Tea and Kapchorua Tea, both listed on the Nairobi Securities Exchange, have reported significant declines in profit for the half-year ending September 2024. Williamson Tea has fallen into the red, posting a loss of KSh 122.4 million, a stark contrast to a profit of KSh 477.1 million in the same period last year. Meanwhile, Kapchorua Tea saw its profits drop by 91.6%, falling to KSh 18.2 million from KSh 218.1 million in 2023.
Williamson Tea is the majority shareholder of Kapchorua, owning 39.56% of the company. Despite this relationship, both companies have faced similar challenges, including an oversupply of Kenyan tea that continues to exceed global demand. This situation has been compounded by a stockpile of unsold tea held by the Kenya Tea Development Agency (KTDA), which has driven prices down in recent months.
In terms of revenue, Williamson Tea saw an 11.9% decline, bringing in KSh 1.9 billion. The company also reported a loss from operations of KSh 216.9 million. Similarly, Kapchorua’s operations were also affected, recording a small loss of KSh 5.1 million despite a 17.3% increase in sales to KSh 1.1 billion. Additionally, Kapchorua’s biological assets valuation decreased significantly, falling to KSh 7.9 million from KSh 20.5 million in 2023.
Both companies have expressed concerns about the market outlook, stating that the current market depression is likely to persist for the remainder of the financial year. They emphasized the importance of securing new customers and controlling costs as they navigate these difficult conditions.
Williamson and Kapchorua, which share directors, are considered among the more expensive stocks on the Nairobi Securities Exchange. However, following their underwhelming financial results, both firms have suffered significant capital losses. Williamson’s stock (WTK) closed at KSh 232.00, marking a 3% decrease from the previous day. Kapchorua’s stock (KAPC) saw an even larger drop of 13.3%, closing at KSh 234.00. Both companies did not declare an interim dividend.