Companies
Unga Group sinks into Sh131.3m loss on increased cost, inflation
Wednesday March 01 2023
Unga Limited silo in Eldoret. FILE PHOTO | NMG
Listed food processor Unga Group has reported a loss of Sh131.3 million for the six months to December 2022, reversing a profit of Sh8.4 million in the previous year, on increased operating expenses, high inflation and the weakening shilling.
The miller’s revenue jumped 36 per cent from Sh8.8 billion reported in December 2021 to Sh12 billion on higher prices for final products amid inflation.
Inflation and poor weather have affected the firm’s suppliers and farmers.
“Revenue growth of 36 per cent over same period prior year is mainly attributable to increased finished product prices to partially recover raw material price inflation,” the miller said in a statement.
“Profit before tax was negatively impacted due to increased raw material prices and foreign exchange losses.”
Unga reported an increase in total assets to Sh12.8 billion from Sh9.9 billion in December 2021.
The firm disclosed in its annual report increased competition, noting that the marginal sales growth registered in the review period came from raw material price inflation.
Competition has sparked a price war with most firms betting on lower prices to gain market share in an economy where rising inflation has hurt consumers’ purchasing power.
During the review period, the listed miller introduced new products.
“New products were added to the portfolio, including EXE Cake Mixes… The group continues to invest in the development of new products to be introduced to our consumers in due course,” Unga said.
The company’s total cash at the end of the six months to December 2022 stood at Sh920.6 million and equity attributable to shareholders was Sh4.3 billion.
