A worker at an ARM Cement plant. file photo | nmg
Cement maker ARM’s net losses widened 2.3 times to Sh6.5 billion in the year ended December on the back of lower sales and thinner profit margins.
The Nairobi Securities Exchange-listed firm had made a net loss of Sh2.8 billion the previous year.
The
cement manufacturer’s sales declined 32 per cent to Sh8.6 billion amid
vicious price wars in the Tanzanian market where the commodity’s price
fell 30 per cent.
ARM’s deeper losses ate into its shareholder funds which dropped by Sh7 billion to Sh27.7 billion.
“2017 was the most challenging for the group since the company’s
listing on the Nairobi Securities Exchange in 1997. Whilst the
management has navighated many business difficulties well in the past,
raised capital for expansion, increased net profits and market
capitalisation continuously over a 14 year period up to 2015, the
challenges of the past year have been unprecedented,” ARM said in a
statement.
The company’s share price has fallen
steadily since its multi-year losses started in 2015, with the stock
closing at Sh2.9 on Thursday in what assigned it a market value of Sh2.7
billion.
Recovery efforts
ARM
is yet to finalise its asset sales, new capital raising and debt
restructuring that it says is key in turning around its operations. The
company is expected to give investors an update on its recovery efforts
at the end of August.
“The group anticipates providing
shareholders with an interim update of its efforts within 90 days from
this announcement,” the company said, adding that it is expanding the
list of assets to be sold in the near term.
ARM did not
specify which new assets could be offloaded in addition to earlier
announcement of selling non-cement businesses including subsidiaries
involved in fertiliser and mineral production.
The company has brought on board several corporate fixers including dealmakers who are expected to help in the asset disposals.
British
investment fund CDC Group, which holds a 41 per cent stake in ARM, has
recalled its two board appointees Ketso Gordhan and Pepe Meijer and
replaced them with Sofia Bianchi and Rohit Anand.
Ms
Bianchi’s experience includes her previous role as head of special
situations at Blue Crest Capital, one of Europe’s largest hedge funds.
Mr Anand has over 11 years of experience investing in Asia and Africa.
Konstantin
Makarov, the managing partner of advisory firm StratLink Africa, has
also joined the company’s board to replace Rick Ashley who resigned last
month.
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