Limuru Tea half-year loss deepens despite revenue growth
Higher production expenses and weaker cash flows offset modest revenue gains, widening Limuru Tea’s half-year loss in 2025.
KENYA – Listed agricultural firm Limuru Tea PLC has reported a deeper half-year loss for the six months ending June 2025, as rising labour costs eroded margins despite revenue growth.
The company posted a net loss of Kes 22.2 million, more than triple the Kes 6.8 million (US$52.6k) loss recorded during the same period in 2024. Revenue, however, grew 8% to Kes 56.84 million from Kes 52.85 million (US$409k) a year earlier, driven by increased tea volumes and turnover.
Tea volumes rose 5% to 433 tons, while turnover climbed 8% to Kes 56.8 million (US$439.8K). Despite these gains, rising operational costs outpaced revenue growth, weighing heavily on profitability.
The company’s balance sheet showed weakening fundamentals, with retained earnings declining to Kes 128.9 million (US$991K) from Kes 151.2 million at the close of 2024.
Total assets dropped 10% to Kes 176.5 million, reflecting reduced receivables and depreciation of property, plant, and equipment. Current liabilities rose to Kes 19.9 million, attributed to higher payables and accrued expenses.
Cash flow from operations fell sharply to Kes 0.3 million compared to Kes 7.9 million in the first half of 2024, indicating weaker underlying cash generation. However, cash balances remained relatively steady at Kes 7.5 million.
The board opted against declaring an interim dividend, citing rising labour and production expenses as well as soft global tea prices pressured by foreign exchange fluctuations in key markets.
“Operational costs have increased significantly due to rising labour expenses, leading to higher overall production costs. Contrary to expectations, market prices have declined, primarily influenced by global foreign exchange challenges in key tea markets,” said Chairperson Dorcas Muli.
Looking forward, Limuru Tea plans to prioritize cost containment measures and quality improvement initiatives to safeguard margins in a challenging operating environment.
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