Kakuzi profits plunge amid Midle East war

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Kakuzi has reported a massive 97.6 per cent drop in net profit, with the firm citing disruption of key routes to its export markets due to the ongoing US-Iran war as a major reason behind its losses. The producer further cited softening demand for its key exports to Europe and other markets.

The company reported a profit of Sh7.11 million for the six months to June this year, down from Sh295.44 million over a similar period last year.

The firm has further issued a profit warning for the full year period to December 2026, indicating that it does not anticipate an improvement in the conditions for the remaining half. The firm’s board did not recommend the payment of an interim dividend.

“The year-to-date trading in our two core crops has been negatively impacted by geo-political instability impacting key shipping routes into Europe, a lower anticipated overall avocado volume and a downturn in market demand for macadamia,” said the company in a statement yesterday.

Kakuzi noted that there was oversupply in the global avocado market that put pressure on prices as well as the war in the Middle East that disrupted shipping routes. These factors, the firm said, weighed heavily on returns from avocados, whose operating profit for the half year fell to Sh215.9 million from Sh394.9 million over a similar period in 2025.

Earnings from macadamia, another key product for the firm, were also hit by rising global supply and weaker demand, with half-year operating profit dropping significantly to Sh68.2 million, compared to a profit of Sh318.8 million in the half year 2025.

The firm added that blueberry continued its trend of profitable growth, posting a half-year operating profit of Sh15.1 million up from Sh13.4 million in 2025.

The company also said it expected its profit for the year to December this year would fall by more than 25 per cent.

“This profit warning notice arises from trading information, market forecasts and unaudited results to June 30, 2026, among other data sources currently at the board’s disposal. We therefore wish to report that our net earnings for the period ended December 31, 2026 may be at least 25 per cent lower than that reported for the year ended December 31, 2025,” said Kakuzi.

“Exceptionally dry conditions on the farm at the end of 2025 and the Middle East conflict along with the softening of the international macadamia market are anticipated to negatively impact results.”