In Summary
- The DSE-listed company said the results were largely aimed at damage control after it had earlier published a cautionary notice expecting a drop in operating profit.
- The cement maker did not declare interim or final dividends to shareholders for the period.
- Its current cement production capacity is measured at just over 1.25 million tonnes a year
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Tanga Cement Plc has published results for for the half year ending June 30, 2019.
The Dar es Salaam
Stock Exchange-listed company said the results were largely aimed at
damage control after it had earlier published a cautionary notice
advising its shareholders that it expected a drop in its operating
profit.
"The company's
sales revenue declined by only 1 percent (from Tsh98.9 billion to
Tshs97.6 billion) in the first half of 2019 compared with the first half
of last year, and it was able to sustain a healthy gross profit margin
of 26 per cent for both period", said the board chairman Lawrence Masha.
Mr Masha attributed
the drop to market headwinds in an increasingly competitive cement
sector coupled with additional depreciation expense triggered by the
adoption new IFRS 16 accounting standards on leases.
In October the
company, which trades under its Simba brand name, published a cautionary
notice advising its shareholders that it expected its operating profit
for the first six months of 2019 to be "between 112 and 122 per cent
lower than that of the comparative period for 2018."
"Tanga Cement Plc
also expects that its loss per share for the period ended June 30 will
be between Tsh157 (6.8 US cents) and Tsh167 (7.2 US cents), which is
between 461 per cent and 496 per cent lower than its loss per share for
the six months ended June 30, 2018," the notice signed by Mr Masha
warned at the time.
A review of its
unaudited financial statements for the period shows that the cement
maker recorded a loss before tax of Tsh12.9 billion and net loss after
tax of Tsh10.2 billion in the first half of 2019, compared to a Tsh1.8
billion loss before tax and Tsh1.8 billion net loss after tax during the
comparative period for 2018.
Cash generated from
trading activities improved by 17 per cent from Tsh16 billion in 2018
to Tshs18.8 billion in 2019, while cash flows from operations also
improved by 33 per cent from Tsh14.3 billion to Tsh19.1 billion during
the same period.
Mr Masha added that
the company has invested in additional 'once-off' expenses to expand
and improve its sales, logistics and distribution services to customers
in the long term to "yield the desired returns for the remainder of the
year (2019)."
The cement maker did not declare interim or final dividends to shareholders for the period.
Founded in 1981,
Tanga Cement is 62.5 per cent owned by Afrisam Mauritius and with a
market capitalisation status of Tsh38.2 billion.
Its current cement production capacity is measured at just over 1.25 million tonnes a year.
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