East African Portland Cement Company (EAPCC) has announced that its net loss for the six months to December has worsened nearly four times to Sh969.6 million on lower revenues.
The financially struggling cement maker saw its revenues drop by Sh660 million to Sh3.06 billion, with management attributing this drop to the politics-driven slowdown of the economy last year.
Portland’s cost of sales dropped by five per cent to Sh2.92 billion, but management says these expenses would have been even less were it not for an increase in price of coal and electricity.
“Revenue declined by 18 per cent…due to slow market uptake on account of prolonged political activity which dampened investment decisions and thus slowed down economic activities,” EAPCC says in a statement Wednesday.
“This was further impacted by the knock on effects of interest rates capping and prolonged drought on the general macro-economic environment.”
The firm, which has been hit by internal and external misappropriation, saw its administration and selling expenses drop by six per cent to Sh1 billion due to “ongoing cost management initiatives.”
Portland’s management remains optimistic about the company’s future outlook, noting that the government’s push for affordable housing and a revamped manufacturing sector will benefit it.
EAPCC is exploring several major fundraising options to boost its financial health in an increasingly competitive regional cement business that has attracted more players.
These include selling part of its 14,000-acre idle land to the government.
“Given that the company has enormous resources in the form of idle and fully mined parcels of land, the Board expects to be granted the necessary approvals to generate value from these parcels,” the firm said Wednesday.