Unga Group pays US$88,380 to former MD amid restructuring, loss reduction efforts

KENYA—Unga Group, a publicly listed Kenyan food and animal feed manufacturer, revealed in its latest financial report that it paid its former managing director, Joseph Choge, KES 13.25 million (US$88,380) in severance following the termination of his contract.

This payment was part of his total remuneration package of KES 56.2 million (US$374,887), which also included a salary of KES 43 million (US$286,507) for the financial year ending June 2024.

Mr. Choge, who joined Unga Group in December 2021, exited the company on May 31, 2024, after a tenure of just over two and a half years.

Although the company did not specify the reasons for his departure, his exit coincided with a period of significant financial difficulties. Unga Group recorded annual revenues exceeding KES 23 billion (US$153.2 million) but continued to report losses.

Following Mr. Choge’s departure, Unga Group appointed James Nyutu as acting managing director, effective June 4, 2024.

Mr. Nyutu, a seasoned insider with over a decade of experience, previously served as the finance and ICT director for the group and its subsidiaries since 2013. His deep understanding of the company’s operations is expected to guide Unga Group during its ongoing restructuring and recovery efforts.

In December 2023, the company undertook a significant leadership overhaul, aimed at improving decision-making efficiency and operational streamlining.

Chairperson Isabella Ochola-Wilson emphasized that the restructuring focused on empowering employees and driving business performance, rather than merely cutting costs.

Unga Group has been progressively reducing its workforce over recent years, with employee numbers falling from 400 in 2022 to 285 by June 2024.

This reduction included the elimination of 35 management and administrative roles in the past financial year, although 21 new hires were made in sales and distribution to support key operational areas.

The company reported a sharp rise in redundancy costs, which increased from KES 32.9 million (US$219,142) to KES 120.1 million (US$800,672) during the year.

Despite this, total salary and wage expenses dropped by 17.4%, falling from KES 774.2 million (US$5.15 million) to KES 639.1 million (US$4.25 million).

Despite ongoing challenges, Unga Group managed to narrow its losses for the financial year ending June 2024.

The company reported a loss of KES 669.5 million (US$4.45 million), a significant improvement from the previous year’s KES 959.3 million (US$6.38 million).

This reduction was attributed to enhanced operational efficiencies and a one-time foreign exchange gain, thanks to the strengthening of the Kenyan shilling, which helped lower finance costs.

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