Unga Limited signals job cuts as profit drops by 88 per cent
The board of Unga Limited has indicated plans to trim its workforce as part of a wider initiative to improve its waning performance.
On Friday, the firm posted an 88 per cent profit after tax wipe out to Ksh.66.2 million from Ksh.544.8 million in the year ending June 30, 2020.
“The board is taking several initiatives to deliver improved performance; these, among others, include right-sizing, automation and new product introductions,” Unga Limited said in a notice issued Friday.
The company attributed its near profit wipe out to reduced consumer demand along with the high cost of inputs which mainly entail maize and wheat grain purchases.
“At Ksh.18.2 billion, group revenue was up from the prior year. However, volumes declined by four per cent due to low consumer demand and aggressive pricing of finished products by competitors,” Unga Limited added.
The group’s financing costs additionally contributed to the profit decline as they went up by 22 per cent to Ksh.203 million on the back of higher capital expenditure and borrowings for working capital.
The company says it will continue taking a cash preservation stance as it remains pragmatic to a near term recovery.
The board of Unga Limited has subsequently held off against a dividend declaration.
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