Flame Tree Group firm makes and sells plastic water tanks and playgrounds as well as cosmetics, snacks, and spices. The firm said the profitability shows its continuous growth for four years. But it sees uncertainties this year because of high cost of raw materials.
The firm’s profit after paying tax rose 36.4% to Sh102.5 million for the year ended December 2021. It earned net income of Sh75.1 million in 2020.
Flame Tree Group sold goods worth Sh3.3 billion in 2021, an increase from the previous year’s Sh2.9 billion. The firm said increase in oil prices, shipping costs and cost of raw materials ate some revenue earned.
Mr Heril Bangera, chief executive officer, Flame Tree Group, said he was happy with the results after a difficulty 2021. He said last year was the most difficulty year of Covid-19, because of high oil prices and high shipping costs.
“We are very satisfied with the results achieved this year,” Mr Bangera said. “[We’ll] continue to show a remarkable growth for the fourth year in a row as well as a strong and healthy financial position.”
Ms Beatriz Meijide, group chief financial officer, said increased international shipping costs and oil prices were directly linked to costs of imported raw materials. The firm imports plastic polymers to make plastic products.
Roto Moulders, Jojo, Chirag, Flame Tree Africa, Polyplay in Kenya are part of Flame Tree Group. Its other firms are found in Rwanda, Ethiopia, Mozambique, and United Arab Emirates.
Board of directors will not recommend payment of dividend during annual general meeting. The firm will hold its annual general meeting online on 7 July 2022.
What increased the firm’s revenue?
The group’s revenue increased by 16% in 2021 to Sh3.3 billion. In 2020 the firm’s sales increased by 20%.
Group Chief Financial Officer Beatriz Meijide said sales increased for all its products. She said the firm increased sales for plastics, such as water tanks and playgrounds, cosmetics, as well as snacks and spices.
However, Ms Meijide said cosmetics, snacks, and spices were growing faster than plastics. She said the faster growth of cosmetics, snacks and spices was because their market had more room to grow. On the other hand, Roto water tanks is a market leader in all the countries the firm operates, Ms Meijide said.
Flame Tree Group has invested in new machinery to help it make new products. It has increased the capacity of its factory with new ovens. In addition, the firm has new machinery to make caps, bottles, nets, plastic furniture, and household items.
The firm is preparing to reduce negative impact resulting from Russia’s attack of Ukraine. As a result, prices for fuel and food have surged.
Chief Executive Officer Heril Bangera said the firm would continue to do what will help it cut the negative impacts. One of them is looking for more raw materials from different countries.
“We have diversified our suppliers of raw materials, especially polymers, from different regions in the world,” he said. “However, this is the main uncertainty we are facing in 2022.”