E.A. Portland Cement Half Year Loss

Company Announcements

Results

East African Portland Cement issued its Half Year results for the period ending December 2015. Revenues were up by 11.9% to stand at KES 4.620Bn compared to a similar period in 2014. Gross Profit went up by 36.3% to KES 853Mn.

In regards to the bottom-line EAPC recorded a loss before tax of KES 745Mn compared to a loss of KES 124Mn in 2014. The losses being experienced in EAPC begin with the Administration and Selling Expenses which are higher than their Gross Profit figures. The losses are compounded even more with increasing finance costs and foreign exchange losses.

Forecasts

EAPC forecasts that Full Year earnings for 2016 will be at least 25% lower than earnings of the previous year.

Stock Performance

EAPC’s current share price is KES 48.00. We have taken a 10 year chart of EAPC, despite the volatility on balance the trend has gone down since 2006. The last time EAPC paid a dividend was in 2013 at KES 0.75

EAPC 10 yrs.JPG

Source: Reuters

Conclusion

Demand in the construction sector is high accompanied with stiff competition. EAPC should consider enforcing strict cost management going forward.

Download Link: E.A_Portland_HY_31-Dec-15.pdf

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