Unga Group Limited announced their financial results for the FY2007 ended 30^th, June 2007. In 2007, Unga reported a net profit of KES82 million, 124% increase from their profit in FY2006. Unga’s operating profit dropped by 38% from KES228 million in 2006 to KES142 million in 2007. Unga non-current liabilities dropped by 43% as at June 2007 compared to the balance sheet as at June 2006. Cash Generated from operating activities in 2007 dropped by 24% to KES172 million compared to Cash Generated from operating activities in 2006.

The Directors are pleased to report that despite an increasingly more competitive environment the company has recorded a net profit for the third consecutive year.

The increasing prices of grain have continued to put pressure on gross margins particularly in the human nutrition sector. Additionally, the difficulty in passing on the impact of the increasing wheat grain prices to the consumer, and the effect of reduced maize volumes, attributed to new entrants into the segment, has impacted negatively on the performance of the human nutrition sector. Consequently, operating profit is lower than prior year.

The animal health and nutrition sector has seen significantly improved performance, driven by increased sales of poultry feeds. Since demand for animal nutrition is expected to remain robust, the company is evaluating opportunities to increase production capacity. The company is well positioned to compete for its share of the available market despite depressed demand for wheat flour products, which is expected as a consequence of high prices resulting from the extremely tight world wheat supply situation.

In view of the need for capital to undertake further plant modernization the Board does not believe it’s prudent to recommend the payment of a dividend.