Unga Group has grown its profits nearly four times to Sh511 million in the first half of the year, giving a glimpse to the numbers that have attracted an international buyer.
The firm says its profit for the six months to December 2017 stood at Sh511 million, up from the Sh132million it reported in a similar period in 2016.
At this growth, which is 280 per cent up, the firm has reported one of the highest profit jumps among listed companies in Kenya this season.
Its turnover rose to Sh11billion, from Sh10billion in 2016, in a period that millers enjoyed government subsidies due to shortage of maize.
It said in a commentary accompanying its financials that animal nutrition volumes increased by 20 per cent supported by a stable supply of raw materials that ensured continuous supply during the drought.
“The improved availability of grain significantly improved the group’s ability to produce maize meal and animal feeds at better yields, resulting in improved margins,” the firm said adding that the new supply chain and operational improvement initiatives also contributed to the gains in profitability.
Its selling and administration costs increased due to higher provisions for doubtful debts. The firm said its bakery business is working to recover its market presence and repositioning itself in response to current challenges.
“The new wheat mill project underway in Eldoret is on track to be commissioned by the end of the current financial year. This is expected to significantly increase milling capacity and improve product availability,” the firm said in the statement on Wednesday morning.
An American firm Seaboard Corporation has announced its intention to buy out Unga Group. The US Company provided Unga with raw materials, management services, equipment, spares and trade finance facilities worth Sh3.8 billion in the year ended June 2017 and this must have given it a peek into the Unga numbers.