Eaagads Ltd. (EGDL), a Kenyan coffee producer, jumped the most in more than six months after it said earnings are expected to improve in the second half.
Shares in the Ruiru, Kenya-based company climbed 5 percent to 37 shillings by the 3 p.m. close in the capital, Nairobi. That’s the biggest gain since May 9, according to data compiled by Bloomberg.
Eaagads announced earlier today that net income fell 26 percent to 26.3 million shillings ($294,447) in the six months through September even as sales grew 5.9 percent to 68.4 million shillings. The company didn’t repeat a revaluation of its biological assets that resulted in a gain of 47.3 million shillings a year earlier because of the shilling’s volatility on domestic foreign-exchange markets this year.
“There is an outright biological gain that has not been booked,” Aly Khan Satchu, chief executive officer of Nairobi- based investment company Rich Management, said in a phone interview. “The reaction in the share price is confirmation that investors have mentally calculated that the biological gain is worth about 6 shillings to 7 shillings a share.”
Eaagads expects the exchange rate to stabilize and the company to post “better results” in the second half of the fiscal year, it said.
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