, NAIROBI, Kenya, Oct 28 – East African Portland Cement Company (EAPCC) has recorded a net profit of Sh2.488 billion for the full year ended June 30, 2013 from the previous year’s loss of Sh969.7 million.
The performance, which represents a 356 percent improvement, has been attributed to improved sales and cost cutting.
EAPCC Managing Director Kephar Tande says that revenues grew 8 percent to Sh9.2 billion, while the cost of sales dropped by Sh500 million, doubling the company’s profit margin from 13 percent in 2012 to 25 percent in the year under review.
Tande says that turnover grew while cost of sales reduced due to stringent cost management and rationalization of operational activities.
“The results were lifted in huge partly by tax credit of Sh356 million, which arose from write-back of initially provisioned tax expenses that did not materialize in the period under review, and a Sh713 million net gain from revaluation of free hold property,” he said.
Tande says the company also made a gain of Sh595 million from the strengthening shilling and improved performance of its hedging strategy.
“Our growth strategy has paid off; our market has improved from 14 percent in 2012 to 20 percent at the end of June,” he said.
He says the EAPCC is getting more competitive and cement market is positioning itself to grow its market share through deeper market penetration in counties and increased reach in exports destinations of Uganda, South Sudan and Northern Tanzania.
He said they are banking on increased infrastructure projects in the country to lift demand and appealed to the government to remove duty exemption on imported cement meant for government projects.
“As local manufacturers, we are unable to compete for government projects because of this tax exemption,” he added.
Tande announced that the company plans to invest Sh500 million in plant and equipment improvement in the current year to boost production and efficiency.
He said the money will go into constructing a new packing line, acquisition of new clinker and milling, and establishment of a new pre-cast line of products.
“Investment over the next two years is expected to hit Sh2.7 billion, he said.
The company declared a dividend of 75 cents per share, up from 5 cents two years ago a reverse from last year where they did not pay divided due to the huge loss it suffered.