THE chairman of Tanga Cement Company Limited Hakan Gurdal (pictured) is optimistic about the future recovery of the company’s financial performances, despite of more than doubled loss during the fourth quarter of last year.
He believes that the group’s growth hinges on Tanzanian construction industry demand for cement, supported by the improved economic performance.
Gurdal notes that increased infrastructure investment and a growing consumer base will further drive the demands for cement, the major driver of the company’s business portfolio and financial performance.
“The Group is optimistic about the government’s Development Vision 2025 program’s positive impact on infrastructure development, with expected continuing momentum in 2024,” the board chairman said this in the introductory remarks on the recent quarterly financial results.
“With Tanzania remaining a significant player in the East African construction market, cement output is anticipated to increase and Tanga Cement is well positioned to take advantage of the growth opportunities in the regional market.”
According to the company unaudited financial results for the fourth quarter of last year published last week, the company experienced a 17 percent decrease in sales revenue, amounting to 45.7bn/-, from 55.3bn/- recorded in the fourth quarter of 2022.
This was primarily attributed to diminished sales volumes resulting from an overall decrease in cement demand in the country and maintenance requirements to our major production units, which were necessitated by frequent electrical power disruptions and voltage fluctuations.
Sales expense also went up by about 75 percent to 1.6bn/- during the fourth quarter of last year, from 936m/- during the corresponding quarter in 2022.
The Group’s overall financial performance for the fourth quarter of 2023 reflected a loss before tax amounting to 32.9bn/-, compared to a loss of 14.9bn/- in the corresponding period of the previous year.
The pre-tax loss is primarily attributed to interest expenses on term loans and adverse foreign exchange fluctuations, influenced by the weakening Tanzanian Shilling against the US Dollar, according to Gurdal.
Cash generated from trading activities experienced a decrease of 33 percent, which can be attributed to the increased expenditure in maintenance and comparatively low sales volume during the quarter.
Congruently, net cashfows used in financing activities increased by 538 percent due to the principal and interest repayment of working capital loan facilities.
“Despite these challenges, the group remains committed to its sales, logistics, and cost optimisation initiatives, maintaining a positive outlook for 2024 amidst a competitive landscape and global geopolitical unrest,” said Gurdal.
The company did not declare an interim dividend to shareholders in 2023 to remain prudent with available cash resources in order to remain sustainable through the global economic uncertainties and the high fuel prices coupled with pronounced scarcity of major foreign currencies affecting the local economy.
He said the board has decided to continue committing available cash generated to operational commitments.
Last year, Scancem International DA successfully acquired 68.33 percent of the shares in Tanga Cement PLC from Afrisam Mauritius Investment Holdings Limited.
This came after an extraordinary meeting of shareholders approved the transaction by a significant majority vote, whereby the parties concluded the transaction with effect from 27 November 2023.
“The resulting acquisition of the controlling shareholding in Tanga Cement PLC by Scancem International DA, a subsidiary of the Heidelberg Materials group, allows Heidelberg Materials to further strengthen its long-standing presence in the cement industry in Tanzania, unlocking value for present and future shareholders, employees, customers and other stakeholders,” the chairman explained.
No comments :
Post a Comment