New KCC reports US$7.38M loss in year 2025

KENYA – New Kenya Co-operative Creameries has reported a US$7.38 million (KES 953 million) net loss, drew US$18.56 million (KES 2.40 billion) in government grants, and received a going concern warning for the fourth consecutive year, in the year ended 30 June 2025.

The deterioration predates the revenue decline: The last meaningful pre-tax profit on record was FY2020, when it made US$736,000 (KES 95 million) on US$67.96 million (KES 8.79 billion) in revenue, with a 30.3% gross margin.

By FY2021 revenue had risen to US$73.2 million (KES 9.46 billion), the highest in the available record, yet pre-tax profit had collapsed to US$20,900 (KES 2.7 million) and gross margin had already fallen to 26.6%.

Since that peak, revenue has fallen 22% to US$56.9 million (KES 7.35 billion). Four consecutive pre-tax losses have totalled US$32.96 million (KES 4.26 billion).

Gross margin declined from 26.6% in FY2021 to 5.4% in FY2024 as cost of sales reached 94.6% of revenue, before a partial recovery to 15.4% in FY2025.

Cumulative government capital grants over five years stand at US$387,000 (KES 50 million) in FY2022, US$11.61 million (KES 1.50 billion) in FY2024, and US$18.56 million (KES 2.40 billion) in FY2025. The grants needed to keep the company alive are growing faster than the losses they cover.

Finance costs nearly doubled to USD 2.85 million (KES 369 million) in FY2025. Finance costs now consume 32% of gross profit. Trade payables reached USD 30.8 million (KES 3.98 billion).

The Auditor-General issued yet another qualified opinion, flagging a US$24.5 million (KES 3.17 billion) milk mop-up reserve in equity with no corresponding cash asset.

Payment records show the funds were disbursed to farmers but the cash does not exist on the balance sheet. Eleven prior-year issues remain unresolved.

New KCC has collected between 82 and 87 million litres annually for five consecutive years against a standing budget target of 120 to 122 million litres, achieving just 68-72% of target every year.

Factory commissionings, a US$38.7 million (KES 5 billion) infrastructure commitment, and a presidential KSh 50 per litre price directive have produced no volume growth.

Recently, the company partnered with the County of Elgeyo Marakwet to deliver milk under the school feeding program to Early Childhood Development Education (ECDE) learners.

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