Analysis: what the price gain does and does not establish

The disclosure establishes that Eaagads captured a 32% higher average price on a much smaller sales volume. It does not establish that the company outperformed the market on price. The ICO composite indicator fell through most of the financial year, and Colombian Milds averaged lower in March 2026 than in October 2025. A grower’s realised annual average depends on when in the year lots were sold and how they graded, and the announcement gives neither the monthly split nor the grade mix. The comparison with the ICO series is therefore directional, not a like for like benchmark.

The second point a careful reader would test is durability. Of the KShs 149,852 thousand of total comprehensive income, 122,257 came from other comprehensive income, and 120,185 of that from asset revaluation. Revaluation gains on land and mature plantations reverse as readily as they arrive; the prior year showed a 154,629 negative swing on the same line. The trading result, 27,595 of profit for the year, is the smaller and the more repeatable number.

Third, the cost line deserves attention. Cost of production fell from 193,619 to 162,986 while production fell only 5%. That combination points to costs that move with volumes harvested and processed rather than with acreage, and it is the reason gross profit rose on lower revenue. Whether it holds if the crop rebounds is the open question in the outlook.

Cash tells a consistent story. Operating cash of 43,696 nearly doubled and comfortably exceeded the 27,595 accounting profit, which is what one expects when a large share of the reported equity gain is non-cash.

What the documents say

Eaagads Limited (NSE: EGAD) published audited results for the financial year ended 31 March 2026 on 28 July 2026, reporting a 125% rise in pre-tax profit to KShs 39 million from KShs 17 million. The Nairobi listed coffee grower sold roughly a third less coffee than it had a year earlier and still earned more, because the average price it received rose by 32% to USD 7.6 per kilogramme of clean coffee.

The result is unusual in one respect. Most of the profit improvement at Eaagads came from a cost line falling faster than a revenue line, not from a revenue line growing. That is what a grower’s accounts look like when a short crop meets a strong market.

A smaller crop sold at a better price

Sales volume fell 33%, or 87 tons, to 264 tons. Production fell 5%, or 14 tons, to 281 tons, which the company attributed to high temperatures. The gap between the two figures matters: Eaagads sold less than it grew during the year, so part of the volume decline sits in timing rather than in the field.

Revenue reflected the smaller sales book. In thousands of shillings, the company reported 257,429 against 277,266 for the year to 31 March 2025, a decline of roughly KShs 20 million on a KShs 277 million base. Against that, the average realised price of USD 7.6 per kilogramme of clean coffee was 32% above the prior year. Without that price move the revenue line would have fallen far further, and the profit line with it.

Where the profit came from

Cost of production fell to 162,986 from 193,619, a larger absolute reduction than the fall in revenue. Gross profit therefore rose to 98,898 from 86,303 even though the top line shrank. A fair value gain on biological assets of 4,455, against 2,656 a year earlier, sits above the gross profit line.

Net operating costs came down to 59,728 from 68,869. Profit before taxation reached 39,170 against 17,434, and after a tax charge of 11,575 against 5,589, profit for the year was 27,595 against 11,845. Basic and diluted earnings per share were 0.86 against 0.37.

The audited accounts were approved by the board of directors on 28 July 2026. Deloitte & Touche LLP, Certified Public Accountants (Kenya), audited them and issued an unqualified audit opinion.

The balance sheet moved on revaluation, not on trading

Shareholders’ funds rose to 1,443,567 from 1,293,715. Almost all of that increase came from other comprehensive income of 122,257, against a loss of 154,629 the previous year, which swung total comprehensive income to 149,852 from a negative 142,784.

The statement of changes in equity separates the components. Of the 122,257, some 120,185 landed in the revaluation surplus and 2,072 in retained earnings. A transfer of excess depreciation moved 8,861 out of the revaluation surplus and into retained earnings. The revaluation reserve closed at 1,175,358 against 1,064,034, and retained earnings at 228,013 against 189,485. Share capital was unchanged at 40,196.

Total assets stood at 1,760,526 against 1,574,880, split between non-current assets of 1,484,287 and current assets of 276,239. Non-current liabilities were 252,347 against 228,316 and current liabilities 64,612 against 52,849.

Cash generation improved alongside earnings. Net cash generated from operating activities was 43,696 against 22,905. Investing outflows were small at 146 against 4,432, while financing outflows rose to 30,869 from 1,970. Cash and cash equivalents closed at 43,925 against 31,578, after a net increase of 12,681 and an exchange rate effect of negative 334.

The coffee market Eaagads sold into

The company’s financial year ran across a period of falling benchmark prices. The International Coffee Organization composite indicator price averaged 326.38 US cents per pound in October 2025, when Colombian Milds averaged 403.25 US cents and Other Milds 403.79 US cents. By March 2026, the month Eaagads closed its books, the composite indicator averaged 273.70 US cents per pound, with Colombian Milds at 337.45 US cents and Other Milds at 334.34 US cents.

Kenyan arabica is classified within the Colombian Milds group in the ICO series. Kenya’s own shipments were weak early in the calendar year. African exports of all forms of coffee rose 5.9% in February 2026 to 1.43 million bags from 1.35 million bags, but Ethiopia, Kenya and Rwanda together saw exports fall 15.7% to 0.48 million bags from 0.57 million bags.

Outlook and dividend

Eaagads said strong flowering signals a potential rebound toward 320 tons for the 2026/27 season, split between 170 tons from the early crop and 150 tons from the late crop. It described rainfall projections as above average and pointed to climate smart agricultural practices intended to make yields more consistent, a plan to expand the area under coffee farming, and water harvesting.

Benchmark prices rose after the balance sheet date. The ICO composite indicator averaged 287.26 US cents per pound in July 2026, a 15.4% increase on June 2026, with Colombian Milds up 18.1% to 383.39 US cents. Kenya drove that group’s upturn in June 2026, lifting exports by 39.2% to 0.11 million bags from 0.08 million bags.

The board of directors did not recommend a dividend for the year ended 31 March 2026, repeating the nil payment for the year ended 31 March 2025.