Portland Cement cuts half year loss to Sh720m

Portland Cement staff at work. FILE PHOTO | NMG

East African Portland Cement Company (EAPCC) has posted a 10.1 percent cut in net loss to Sh720.79 million in the half-year ended December 2023 helped by a higher tax credit and reduced expenses.

The cement maker results published Thursday morning showed net loss improved from the Sh801.97 million loss it had posted in the preceding similar period.

Portland's revenue grew 22.8 percent to Sh1.84 billion in the period the cost of sales grew by the same pace to Sh1.84 billion, leading to a 22.7 percent rise in gross loss to Sh319.1 million.

“Revenue increased by Sh340 million due to enhanced cement production following the completion of the initial phase of plant refurbishment,” said Portland in a commentary accompanying the financial results.

“However, there was a rise in the gross loss due to increase in the prices of input factors driven by high energy cost and depreciation of the Kenya shilling against the US dollar.”

The shilling, in the six months to December 2023, shed about 11.3 percent of its value against the dollar, impacting prices of commodities such as electricity and fuel.

The Nairobi Securities Exchange-listed firm, however, booked a 3.2 times rise in other operating income to Sh16.47 million, while administration and selling expenses reduced by 22 percent to Sh429.5 million. The two items helped the firm cut its loss from operating activities by nine percent to Sh732 million.

EAPCC also benefited from a Sh13.6 million tax credit, which was 2.6 times more than the Sh5.15 million enjoyed in the previous period, helping it to cut net losses. This was despite finance costs rising by 14 percent to Sh2.2 million.

The board wants to ride on the full implementation of its strategic plan and also reap from the rising prices of cement to return the company to profitability.

“Implementation of the company's strategic plan is on course with progress registered across targets. In addition, the upward revisioning of cement prices in the industry at a point when the company is finalising the plant refurbishment program is expected to reposition the company back to profitability,” said the firm.

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Note: The results are not exact but very close to the actual.