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(Alliance News) - Agriculture firm Camellia PLC on Thursday raised its dividend despite interim revenue declining amid a fall in tea prices.
In the six months to June 30, pretax profit fell by 56% to GBP3.9 million from GBP6.1 million. Revenue fell by 8.8% to GBP117.3 million from GBP127.6 million but more positively, costs of sales were down to GBP92.2 million from GBP100.3 million.
On an underlying basis, the company made a pretax loss of GBP4.1 million, compared to a profit of GBP6.1 million the year before.
The underlying measure does not consider the GBP8.0 million gain "from the release of wage provisions for previous years" following negotiations with the Kenyan Plantation & Agricultural Workers Union and the government of West Bengal in India.
The company declared an interim dividend of 42.0 pence per share, up 5% from 40.0p last year.
Camellia reported that although trading was hurt by the global tea market, it was able to temper this with its "increasing agricultural diversity".
Aside from producing tea, the company also produces avocados, macadamia and speciality crops like wine grapes and citrus.
Tea production fell marginally year-on-year to 43.2 million kilograms from 43.6 kilograms.
Camellia said production rises in India and Bangladesh were offset by a decline in Kenya and little progress in Malawi.
Macadamia production rose by 6%, though avocado production fell by 8%. Both saw higher prices during the first half of 2019 however, Camellia said.
Speciality crops were affected by "issues largely outside" of the company's control, it said, with declines in natural rubber prices in Bangladesh hurting trading and maize and oat crops in Brazil being hampered by fungal infections. Wine grape production in South Africa rose by 24%, but sales were "significantly lower" year-on-year.
Separately, London-listed Kakuzi PLC, in which Camellia has a 51% holding, also released interim results.
The Kenyan agriculture company reported pretax profit of KES355.1 million, or GBP3.1 million. This would represent a 9.2% fall in Kenyan shilling from KES382.6 million and a 7.2% fall in sterling from GBP3.1 million. Sales rose 1% to KES619.5 million from KES613.1 million, however.
Like Camellia, Kakuzi said tea revenue was hurt by production declines and falls in prices.
Looking ahead, Camellia said offering full-year guidance would be difficult given the unpredictability of global tea prices and the fact that its agricultural production and sales are often weighted to the second half of the year.
Shares in Camellia were down 3.0% at 9,800.00 pence each in London on Thursday morning. Shares in Kakuzi were untraded on Thursday, last quoted at 92.50p apiece.