Portland Cement six month loss hits Sh969.5m
Low revenue and declining activity in the construction sector has hit East Africa Portland Cement (EAPCC), with the firm reporting close a billion shillings loss for the half year ended December 31.
During the six month period, Portland Cement’s loss widened to Sh969.5 million from Sh248.1 million.
The cement maker attributes the increased loss to lower demand for cement as well as the heightened political activity in the run up to the general elections.
During the period, Portland Cement’s revenue dropped 18 percent to Sh3.1 billion.
The cement maker was further impacted by inability to secure credit following the cap on interest rates.
“This was further impacted by knock on effects of interest rate capping and prolonged drought on the general macroeconomic environment,” Portland said in a statement.
Portland Cement was further impacted by the global rise in coal prices and high energy costs.
Portland Cement, which is listed on the Nairobi Securities Exchange, has seen its business come under severe pressure, not only from increasing competition in the sector but more so from corruption allegations among its employees.
This has seen the board and management deploy a wide ranging restructuring plan to overhaul its processes as well as cut down on its workforce.
The cement maker says plans are underway to change its operations and improve its financial position.
“This is geared towards reduction of the high finance and administration costs and stabilization of the value chain processes in order to enhance efficiency and ultimately the company’s competitive position,” the company said.
The cement maker plans to offload its noncore assets to generate cash in the short term to shore up its financial position.
The Portland Cement board has initiated talks with the government to green light the sale of land as part of the restructuring plan.
“Given the enormous resources in the form of idle and fully mined prime parcels of land, the board expects to be granted the necessary approvals to generate value from these idle parcels of land,” Portland Cement said.
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