Kakuzi H1 2025: higher sales, lower profits, and a big macadamia rebound
Kakuzi’s half-year numbers to 30 June 2025 paint a mixed picture. Revenue is up strongly as export volumes move, yet profits have slipped as avocado pricing softens and crop valuations ease. The big bright spot is macadamia, which has swung to a chunky profit as market demand improves. Management has held off on an interim dividend.
Below I unpack the key lines from the RNS, why they matter, and what could move the shares next.
Headline figures investors need to know
All figures are shown as per the RNS. KSh means Kenyan shillings.
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Sales | 1,511,260 | 1,175,166 | +28.6% |
| Profit before fair value gain and income tax | 409,666 | 485,583 | -15.6% |
| Fair value gain in non-current biological assets | 25,579 | 21,509 | +18.9% |
| Profit before income tax | 435,245 | 507,092 | -14.2% |
| Profit for the period | 295,538 | 347,511 | -15.0% |
| Earnings per share (Shs) | 15.08 | 17.73 | -15.0% |
| Cash and bank balances (period end) | 890,293 | 130,377 | Up strongly |
| Net cash used in operating activities | 11,871 | (536,131) | Improved |
Note: Management’s highlights also state “half-year profit closed at Ksh 395 million compared to Ksh 951 million posted in 2024, primarily because of a lower crop valuation in 2025.” The condensed statement shows profit for the period at 295,538 versus 347,511. The RNS does not reconcile these two profit references, so assume they relate to different measures.
Avocados: oversupply squeezes margins despite decent volumes
The avocado market was “well supplied” during the half, a polite way of saying prices were under pressure. That contrasts with the same period last year when markets were undersupplied and prices stronger.
Kakuzi shipped 165 containers – equal to 801,840 cartons – spanning its first Pinkerton crop, early-season Hass, and the main Hass export that began in June. Europe remains the core destination, but it is competing with fruit from Peru, South Africa and Colombia. The volume throughput supports the top-line growth, but pricing has clearly crimped margins.
The statement also flags a “lower crop valuation in 2025.” A quick explainer: agricultural groups recognise a fair value gain on biological assets (trees and crops). This non-cash valuation uplift was 25,579 (up from 21,509), but the underlying crop valuation within the avocado portfolio appears to have fallen versus last year’s high watermark, which feeds through to profits.
Macadamia: the standout performer with a sharp profit swing
Macadamia demand is described as “buoyant” and pricing has improved versus last year. That shows up in the numbers: a half-year profit of Ksh 319 million compared with Ksh 32 million in the prior period. That is a material turnaround and a key offset to avocado weakness.
Importantly, 50% of anticipated macadamia production is already committed for sale. While the RNS does not disclose prices or forward margins, having half the crop locked in reduces near-term sales risk.
Blueberries and tea: diversification helps, tea drags
Blueberries are now profitable – a Ksh 13 million half-year profit versus a Ksh 17 million loss last year – with production “in line with expectation.” It is still small in group context, but that is exactly what you want from a new line: early profitability and scope to scale.
Tea went the other way. The unit booked a Ksh 27.5 million loss versus a Ksh 3.5 million loss last year, blamed on lower prices achieved. It is a reminder that commodity pricing cuts both ways and that diversification, while valuable, does not always hit at the same time.
Cash flow and balance sheet: liquidity OK, working capital lower
Operating cash flow was close to break-even with net cash used of 11,871, a marked improvement on the (536,131) outflow last year. Investing cash out was (67,603) and financing outflows were (156,861), largely reflecting dividends paid of 156,800 earlier in the half.
Cash and bank balances ended at 890,293, up significantly on the 130,377 reported a year ago, though down from 1,106,684 at December 2024. Net working capital stood at 2,720,945, down from 3,069,776 a year earlier, which fits with lower crop valuations and inventory dynamics.
Total equity was 5,472,048 versus 5,811,193 at June 2024, while non-current liabilities rose modestly to 1,303,861 from 1,244,674. Retained earnings increased from 5,042,259 at year-end to 5,337,797, reflecting the period profit net of the paid dividend.
Dividend: no interim payout
The directors do not recommend an interim dividend. For income-focused holders, that is a negative, though it is sensible capital discipline in a softer pricing environment. The group did pay a dividend of 156,800 earlier in the period, as shown in the changes in equity.
My take: a classic mixed bag, with clear bright spots
- Positives: Sales growth of 28.6% shows customers are there. Macadamia profitability has roared back and blueberries have turned the corner. Cash levels are healthy versus last year and operating cash burn has eased dramatically.
- Negatives: Group profitability is down about 15% year-on-year, with margin compression driven by avocado oversupply and lower crop valuation. Tea is a drag and there is no interim dividend.
- Quality of earnings: The fair value gain of 25,579 helps pre-tax profit a touch, but the key driver is still realised pricing on exports. Watch the split between cash earnings and biological asset revaluations.
What to watch in H2 2025
- Avocado pricing and European market balance – any easing in supply from Peru, South Africa or Colombia could support prices into the later export window.
- Macadamia contract coverage and realised prices – 50% is committed, but the margin on the remainder will matter for full-year outcomes.
- Blueberry scale-up – sustaining profitability while increasing volumes is the next hurdle.
- Working capital and cash conversion – after a near flat operating cash flow in H1, stronger conversion in H2 would underpin the balance sheet.
- Dividend signals – the board’s stance on a full-year payout will depend on H2 trading and pricing.
Bottom line
Kakuzi has grown the top line but given back some margins in a tough avocado market. The macadamia turnaround is meaningful and diversification into blueberries is starting to pay. If avocado pricing stabilises and macadamia demand holds, the second half could look better than the first.
For now, I would call this a solid but unspectacular half-year, rescued by nuts, nudged by blueberries, and knocked by avocados and tea. Keep an eye on pricing and cash conversion – they will decide whether FY 2025 lands closer to the upbeat or the cautious end of expectations.
