Unga Group swings back to profit as revenue climbs 10% in FY2025

KENYA – Unga Group Plc, a listed milling company, has returned to profitability, reporting a net profit of KES 222.1 million (US$1.69 million) for the fiscal year ended June 30, 2025.

This marks a sharp reversal from a KES 669.6 million (US$5.11 million) loss in the previous year, effectively ending two consecutive years of financial decline and highlighting stronger operational performance despite ongoing market pressures.

This financial breakthrough comes after the flour giant was crowned the overall top performer at the 2025 Kenya Millers Fortification Index (KMFI) Awards for the second consecutive year, dominating the wheat and maize flour categories in fortification efforts.

The company’s revenue for the year rose by 10.2 percent to KES 26.13 billion (US$199.6 million), compared with KES 23.70 billion (US$180.1 million) in fiscal year 2024.

According to the company, this growth was supported by improved efficiencies which delivered an operating profit of KES 704.1 million (US$5.37 million), reversing the prior year’s operating loss of KES 275.6 million (US$2.09 million).

A reduction in finance costs also aided the recovery, with expenses dropping by 29.5 percent to KES 394.6 million (US$ 3.00 million) from KES 559.4 million (US$ 4.25 million). Consequently, the company posted a pre-tax profit of KES 340.8 million (US$ 2.60 million) against a pre-tax loss of KES 805.0 million (US$ 6.12 million) a year earlier.

The milling giant’s management attributed the improved results to lower interest rates, favorable weather conditions that supported raw material availability, and enhanced operational efficiency across business segments.

Additional gains came from strategic investments in customer engagement initiatives and sustainability projects, particularly the adoption of solar power to reduce energy costs and enhance long-term resilience.

Despite the return to profitability, the board of directors decided against declaring a dividend for the year, emphasizing the importance of conserving liquidity and reinforcing the company’s balance sheet.

Shareholders’ equity rose to KES 3.49 billion (US$26.65 million) from KES 3.35 billion (US$25.59 million), while total assets edged down by 1.9 per cent to KES 11.08 billion (US$84.21 million) from KES 11.29 billion (US$85.78 million) in 2024.

However, the company closed the year with a cash balance of KES 190.0 million (US$1.44 million), a decline from KES 251.0 million (US$1.91 million) in the prior period, reflecting higher working capital requirements.

Over the longer horizon, Unga Group’s revenue has expanded steadily, rising from KES 15.1 billion (US$115.1 million) in 2013 to KES 26.1 billion (US$199.6 million) in 2025, equivalent to a compound annual growth rate of around 5 percent.

The company’s profitability remained stable until 2016, dipped in 2017, and rebounded strongly in 2018 and 2019 with record earnings.

However, subsequent challenges led to losses in 2023 and 2024, before the turnaround achieved this year. Total assets reached a peak of KES 12.05 billion (US$ 91.6 million) in 2020 before stabilizing near current levels, while shareholders’ equity, which stood at KES 4.04 billion (US$ 30.7 million) in 2020, has moderated to KES 3.49 billion (US$ 26.65 million).

Earnings per share, once at a high of KES 6.72 (US$ 0.051) in 2018, slipped into negative territory during the loss-making years but have now recovered to KES 1.73 (US$ 0.013) in 2025.

Looking ahead, Unga Group is taking a cautious stance as it navigates global uncertainties such as currency volatility, inflationary pressures, and persistent supply chain disruptions.

The company intends to strengthen its market position by focusing on customer experience, brand building, and diversification within human food and animal nutrition. Maintaining profitability while reinforcing financial stability remains a central goal as Unga works to build sustainable growth after years of volatility.

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