Portland Cement posts Sh386m loss on high expenses

East African Portland Cement (EAPCC) posted a net loss of Sh386 million for the year ended June 30, saying it had been hurt by price competition, high staff costs and the weakening shilling.

A year ago, the cement producer posted a net profit of Sh1.7 billion.

The company will not pay a dividend this year, it said in its results, posted late on Friday.

Earnings per share tumbled to Sh-4.30, compared to Sh19.73 a years ago.

EAPCC said its administrative costs had gone up by Sh700 million following a restructuring of its management, staff compensation and an increase in staff gratuity.

Construction has been one of Kenya's fastest growing sectors over the last decade, fuelled by a burgeoning middle class with higher disposable incomes, as well as government-fuelled infrastructure expansion across the country.

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In its report, the company said it hopes to capitalize on that growth and plans to spend Sh2.5 billion in the coming year on new investments.

"The company has not been left behind and is aggressively investing in new machinery and equipment to increase efficiency and capacity," it said.

But it also said that "the market will continue to be highly competitive, and is likely to see declining prices for the foreseeable future."