Williamson, Kapchorua tea firms double first half profits

Kenya’s Williamson Tea and Kapchorua Tea, which share directors, more than doubled pretax profit for the six months to September 30, helped by a weaker shilling that boosted the value of exports in local currency terms.

But they said tea prices could fall in the next six months of their financial year with expectations of a bigger harvest.

In their results statements, both firms said the onset of the “short rains” season, which usually runs from October to December, “will result in favorable crops over the coming months”.

“There is bound to be a decline in current price levels which could negatively impact the second half of the financial period,” both firms said in their results statements.

Kenya is the leading exporter of black tea and the crop is its top foreign exchange earner.

Kapchorua reported a pretax profit of Sh143.4 million, up from Sh68.2 million a year earlier.

It said its results were boosted by a weakening shilling against the trading currencies and the implementation of rigorous cost control measures.

Williamson reported a pretax profit of Sh543.8 million, up from Sh240.4 million helped by higher sales volumes, as well as the impact of the weaker shilling and cost controls.

The windfall drove prices at the weekly Mombasa auction to a 24-year high as traders scrambled for the limited offers of quality tea available.