Saturday, July 2, 2022

Rea Vipingo issues profit warning to investors

Sisal fibre producer REA Vipingo has issued a profit warning for the year ending September 2014.

The company said its earnings for the period were likely to drop by at least 25 per cent compared to last year.

It attributed this to an expected fall in the value of its biological assets.

“The company currently projects that the reported earnings for the year ended September 30, 2014 may be more than 25 per cent lower than the reported earnings in the previous period,” the company said in a newspaper notice on Wednesday.

The firm, which is the subject of a tough takeover bid by REA Trading Limited and investment firm Centum, last year recorded a Sh442.46 million profit after a re-adjustment of its plants resulted in a net gain of Sh228 million.

Profit from operating activities last year fell from Sh319.1 million to Sh282.8 million, which was offset by the gain in earnings arising from changes in fair value of the company’s biological assets.

TIGHT RACE

There is currently a tight race to take over the sisal producer.

The matter is currently before the Capital Markets tribunal for arbitration.

Its shares have not traded on the Nairobi bourse since November last year when REA Trading made an offer to buy out the company triggering offers and counter-offers.

The company operates sisal plantations in Kenya and Tanzania.

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