Monday, March 2, 2015

Portland Cement posts losses, blames drop in sales and higher production costs

Corporate News
Workers load cement at East African Portland Cement plant in Athi River. PHOTO | FILE 
By GEORGE NGIGI, gngigi@ke.nationmedia.com
In Summary
  • The company was also forced to cut its cement prices to remain competitive following similar cuts by its competitors.

Listed cement maker, East African Portland Cement Company (EAPCC) made losses in the six months to December last year following a drop in sales accompanied by rise in production costs.
The company announced an after tax loss of Sh67.8 million for its half year compared to Sh183.4 million profit recorded in a similar period the previous year.
Portland said its gross profits more than halved after its sales dropped by 9.6 per cent to Sh4.1 billion while its cost of production went up by 7.8 per cent to Sh3.5 billion. It attributed the drop in revenue margins to temporary closure of it packaging and clinker production for maintenance from September to December.
The company was also forced to cut its cement prices by five per cent to remain competitive following similar cuts by its competitors.
Apart from operational challenges the company has also been facing governance issues with its majority shareholders, Treasury and French company Lafarge, fighting for control of the board.
Its share price is trading at Sh65 at the Nairobi Securities Exchange which is 20 per cent lower than March last year.
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