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Kenya's Kakuzi posts H1 profit on tea, lower costs

Published 08/26/2010, 04:29 AM
Updated 08/26/2010, 04:32 AM

* H1 pretax profit 194.5 million shillings, up 255 percent

* Revenues increase 16 percent to 808.27 million shillings

* Reduced costs, weaker currency help profits

NAIROBI, Aug 26 (Reuters) - Kenyan agricultural producer Kakuzi's pretax profit more than tripled in the first half of 2010 thanks to an improved performance in its tea operations and reduced financial costs, lifting its share price.

Profit before tax for the group, which also grows pineapples and trees and rears beef cattle, leapt 255 percent to 194.5 million shillings ($2.41 million).

"The improved profit over the equivalent period last year has been due to satisfactory returns from our tea operations together with significantly reduced finance costs and a weaker Kenya shilling," the firm said in a statement.

Earnings per share surged 1,523 percent to 4.22 shillings but Kakuzi said its directors did not recommend paying an interim dividend.

It said this was due tea prices falling on last year's levels, an uncertain avocado harvest and the need to maintain a positive cash balance.

Kenya is the world's leading exporter of black tea. Heavy rains this year have boosted production and hurt prices compared to last year when drought ravaged the region.

Kakuzi's shares touched a high of 100 shillings in early trade on the Nairobi Stock Exchange and at 0825 GMT traded at 80.00 shillings, unchanged from Wednesday's close. ($1=80.75 Kenyan Shilling) (Reporting by Richard Lough; editing by George Obulutsa and Michael Shields)

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