Athi River Mining swings into losses on currency turmoil

Listed Cement manufacturer Athi River Mining (ARM) posted an after tax loss of Sh469 million for the nine months to September compared to a Sh1.1 billion profit at the same period last year.

The company said on Monday that the losses were largely attributable to the depreciation in regional currencies against the dollar.

The cement maker, which reported an after tax profit of Sh1.1 billion in the same period of 2014, said revenue for the first nine months of 2015 rose 7 per cent to Sh11.7 billion, thanks to increased cement sales in Kenya and in Tanzania.

While the demand for cement grew more than 10 per cent during the period, "the sharp depreciation of both the Kenyan and Tanzanian currencies in the nine months has resulted in an unrealized exchange loss," the company said in a statement.

READ: Stiff competition keeps cement prices down

It said the loss amounted to Sh2 billion on the firm's dollar denominated borrowings.

"The fundamentals for continued economic and construction sector growth remain strong despite the recent currency depreciation and increase in interest rates," the company said.

Buoyed demand

Kenya's shilling has lost about 12 per cent against the dollar so far this year. Tanzania's shilling has lost nearly 20 per cent of its value.

Booming construction in the east Africa region have buoyed demand for cement in recent years but local firms are preparing for increased competition from new entrants like Nigeria's Dangote Cement, which is investing in Kenya.

The company said its board did not recommend paying an interim dividend. The company paid a first and final dividend of 0.60 shillings per share for 2014.