Unga Group, the millers of Exe brand of maize and wheat flour has issued a profit warning for six months ending December 2019.
In a public notice published in the dailies, the company said that the slump in profits is attributed to reduced volumes in the animal nutrition segment.
“The decline in profitability is attributable to reduced volumes in the animal nutrition segment and increased cost of maize and wheat grains, attributable to unfavourable local weather conditions and rallying world wheat prices. In addition to low customer demand, local farmers faced increased competition from imports of farm produce from the region, specifically in the poultry and dairy sectors. (Also), finance costs increased due to capital expenditure and working capital related borrowing,” read the notice in part.
In July 2018, a takeover of the Unga Group by Us-based Seaboard Corporation failed. Seaboard was planning to buy the three quarters of minority shareholders in the firm.
The move would have seen Unga Group delisted from the Nairobi Stock Exchange (NSE) and made a private firm, after buying 46.15 percent of Unga’s shares that are held by minority shareholders.
The rest of the shares are owned by a local group of investors via a vehicle called Victus Ltd.
Seaboard had about 2 percent of Unga before the offer while Victus had a 50.93 percent stake.
Currently, Seaboard is estimated to own 35 percent stake according to NSE.