NAIROBI, Kenya, Mar 2 – East Africa Portland Cement Company (EAPCC) has posted a Sh67.8 million net loss for the half year ending December 2014 from Sh183.6 million net profit in 2013.
The loss is attributable to a seven percent drop in sales volumes, owing to a major maintenance shutdown on its packaging and clinker production lines in the second quarter.
The loss is also attributable to an eight percent decline in sales revenue to Sh4.12 billion compared to Sh4.56 billion the same period in 2013 due to a price reduction of five percent driven by market forces.
Gross profit margin declined to 15 percent from 29 percent same period 2013.
The cement maker was also hit by an eight percent rise in cost of sales from Sh3.24 billion to Sh3.5 billion attributable to the purchased clinker acquired during the maintenance shutdown in the second quarter of the year.
The company contends that price pressure is expected to persist in the near future, with industry installed capacity exceeding cement market demand.
“A successful plant refurbishment was completed in the second quarter of this year and a new product line of precast products is expected in place in the second half. Installation of a new cement packing line is underway and should be commissioned in the second half of the current year,” said Company Secretary Sheila Kahuki.
The directors do not recommend payment of an interim dividend.