Companies

Portland Cement books Sh1.6bn loss from land sale

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Portland Cement plant in Athi River. FILE PHOTO | NMG

East African Portland Cement Company (EAPCC) #ticker:PORT made a loss of Sh1.6 billion from sale of part of its land holdings in the year ended June, an audit of its books by PricewaterhouseCoopers (PwC) shows.

This was a bigger loss compared to the Sh302.3 million made the previous year.

The deals contributed to the cement manufacturer making a pre-tax loss of Sh2.8 billion in the review period.

The land transactions included sale of 900 acres to Kenya Railways and 337 acres to real estate developer Superior Homes.

EAPCC is yet to receive some of the proceeds. The company, for instance, is still waiting to be paid Sh3.6 billion in the deal with Kenya Railways.

The cement manufacturer made a loss of Sh233 million in its deal with Superior Homes, according to the PwC report.

The cement manufacturer had hoped to sell the land to the developer at a price of Sh750 million but got less, an amount which is yet to be disclosed.

EAPCC has planned to sell more properties to reduce its debt load and boost its production but the disposals have been slow.

It had targeted to sell two parcels of idle land in Mavoko, Machakos County, amounting to 2,000 acres.

It was also to surrender another 4,256 acres to the government for construction of affordable homes under the Big 4 Agenda.

EAPCC needs to raise a significant amount of money to meet the debts, a Sh1.4 billion legal award to workers, buy stocks and revamp its dilapidated plant that is operating at 20 percent capacity.

The company’s factory has a maximum output capacity of 1.3 million metric tonnes of cement but during the period it was only producing 300,000 metric tonnes as it could not buy raw materials to operate at full capacity.