COMMENTARY ON THE RESULTS

Tea Production was low not only for the Group but across the tea industry due to severe drought conditions experienced in the first few months of the year. Reduced supplies were met with good demand which boosted prices during the period under review.
The Group reported a profit during the six months mainly from investment and other non-operational activities. Cost of production remains the biggest concern for the Group and the tea industry at large. The Employment and Labour Relations Court judgement which awarded our workers over 50% wage and benefit increase in June 2016 for the years 2014 and 2015 still remains under challenge in the Court of Appeal.
This precipitated amuch publicised strike orchestrated illegally by Union leaders in the month of October and early November resulting in major losses which will affect performance for the next 6 months.

The long electioneering period also had implications on the operations during the period and the subsequent months.

PROSPECTS
So far, the weather has been favourable in the second half of the year and we expect high crops. Increased supply will push down demand and prices.
The Collective Bargaining Agreements which have been pending since 2014 remain the biggest challenge to the Group even as the Court of Appeal judgement is awaited for the years 2014 and 2015.

The future therefore remains very unpredictable.

G K MASAKI
COMPANY SECRETARY

Anytime from now.

2H crop will be high given the rains though prices have tumbled in line with increased production. All in all, I expect a good 2H.

I think they are now late.