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Dry spell erodes profit at Kenya's Limuru Tea

PublishDate:2012-06-11 Source: Author:

NAIROBI (Reuters) - Kenyan agricultural firm Limuru Tea posted a 42.6 percent drop in 2011 pretax profit, after its output fell by a quarter due to a dry spell in the first three months of the year, it said on Monday.

The company produced 2.8 million kg of green leaf and made 627,954 kg of black tea, lower than the previous year's 3.84 million kg of green leaf and 841,439 kg of black tea.

Limuru said crop volume in the first quarter of 2012 had been much better than in 2011 due to rainfall, but said extreme dry weather and frost conditions coupled with a stronger shilling could yet affect earnings this year.

Pretax profit fell to 59.8 million shillings, in spite of a net gain of 21.8 million in the fair value of its biological assets.

It said the full impact of last year's lower production was cushioned by a slide in the shilling against the dollar.

The local currency depreciated by more than a quarter to a record low of 107 per dollar in October. It has since recovered after the central bank adopted an aggressive tightening stance in the fourth quarter of last year.

Earnings per share dropped to 33.7 shillings from 62.4 shillings in 2010. The dividend was unchanged at 7.5 shillings.

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