Troubled Portland Cement in Sh248m six months after tax loss

What you need to know:

The company saw its revenues during the period decline 19 per cent to Sh4.6 billion compared to Sh3.7 billion last year.
The State-owned company’s woes are compounded by decades-long court cases.
New chief executive Simon Peter ole Nkeri has said the success of an underway capital-raising plan is dependent on the government making good on its long-overdue pledge to reduce its controlling stake.

East Africa Portland Cement (EAPCC) has reported a Sh248 million after tax loss for the six months to December 2016 compared to a net loss of Sh528 million in 2015.

The company saw its revenues during the period decline 19 per cent to Sh4.6 billion compared to Sh3.7 billion last year, which it attributed to “harsh operating market”.

“Revenue declined by 19 per cent over the same period last year due to reduction is sales volume by 17 per cent as a result of changes in the competitive landscape,” said the cement maker yesterday. The State-owned manufacturer is seeking to raise billions of shillings to remain afloat.

“Demand for cement is expected to decline as election uncertainties set in coupled with the possible decline of disposable incomes occasioned by drought, general decline in manufacturing sector and near completion of major infrastructure projects,” it said.

“The board is, however, optimistic that with the implementation of the company’s medium term plans the company will return to profitability.”

The company did not recommend payment of an interim dividend.

The State-owned company’s woes are compounded by decades-long court cases that the firm says had been instigated by private developers eyeing its Sh17 billion prime land.

New chief executive Simon Peter ole Nkeri has said the success of an underway capital-raising plan is dependent on the government making good on its long-overdue pledge to reduce its controlling stake in the cement maker.

Auditor-General Edward Ouko flagged the firm’s financial returns that showed Sh1.5 billion in operating loss, the amount being thrice the Sh608 million recorded in a similar period the previous year.