Camellia (LSE:CAM) PLC said it expects pretax profits for the year to be below market expectations as its agricultural business continues to be impacted by adverse weather.
The agricultural company said that heavy monsoonal conditions in northern India and Bangladesh hit production, although this improved pricing compared to last year.
However, the benefit of higher prices “is not currently expected to fully offset the impact on profits of the reduced crop and higher wages.”
Across the region, staff were given wage increases which pushed costs higher, including a 15% hike for staff in West Bengal and 13% for those in the state of Assam, with production in Bangladesh for tea further exacerbated by strike action over the last 10 days.
In terms of nuts and fruits, production of macadamias is expected to be higher than last year.
However, a large number of smaller products carried from previous seasons is impacting average prices, according to a statement.
Demand in key markets, such as China, which is impacted by lockdowns, and USA and Japan, remain subdued, with pricing under pressure.
Avocado production is expected to be above last year, although early indications are that pricing will be below 12 months prior, although the company admits it is difficult to predict pricing due to a “well-supplied summer market in Europe.”
As a result, the group expects total revenue to be slightly above market expectations, and profit below tax will be lower than consensus, should current trends continue.
One of its other investments, AJT Engineers, is facing supply chain issues which is impacting production while BF&M, an insurance company listed in Bermuda, reported a loss in the first half.
Camellia (LSE:CAM), which owns a 36.9% share, means it made a loss of £4.6mln from its operations in the firm, down from a profit of £6.4mln the year prior.