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East African Portland reports operating losses for third year running

Blue Triangle cement is a product of EAPCC/ FILE

Blue Triangle cement is a product of EAPCC/ FILE

NAIROBI, Kenya, Nov 11 – East Africa Portland Cement (EAPCC) has released it delayed full year results for the period ending June 2016 marking the third consecutive year of operating losses.

Full Year operating losses increased 174 percent to Sh1.58 billion, being the second consecutive year for the company to publish its results late.

EAPCC’s operational efficiency continues to lag behind most of its competitors pointing to persistent weaker margins in a price sensitive over-supplied market.

In addition, perennial change in top management remains a key challenge when it comes to strategy formulation and execution.

Earnings per share declined 42 percent to Sh46.06 while operating expenses went up by 24.4 per cent.

Total debt went up by 7.2per cent with notable increase in bank overdraft of 189 per cent.

The firm however grew its revenue by 5.4per cent, the first positive year on year growth since 2013.

Gross profit margin contracted to 17.9 per cent from 21.7 per cent in 2015.

Standard Investment Research Bank says with prices of key imports, fuel oil & clinker, remaining low, the margin squeeze highlights EAPCC’s operational inefficiencies.

“EAPCC’s operational efficiency continues to lag most of its competitors pointing to persistent weaker margins in a price sensitive over supplied market. In addition, perennial change in top management remains a key challenge when it comes to strategy formulation and execution,” Standard Investment Bank states.

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