ARM Cement PLC Board of Directors has released a profit warning announcement projecting that the “Group’s net earnings for the financial year ended 31 December 2017 may be at least 25 percent lower than the level of earnings in the previous financial year, 2016.”
The Group is of the opinion that difficult market conditions have negatively impacted its performance as well as the import ban for coal in Tanzania. Additionally, the Group attributes a possible net earnings decrease on the extended and disruptive election period in Kenya and a strain on its working capital. The Board of Directors also expects “negative year-end provisions for contingencies and impairments of inventories and assets.”
According to its announcement, the Group claimed it is in the process of implementing its turnaround strategy with the disposal of its non-cement projects, and “strengthening its balance sheet through equity injection and debt restructure initiatives that are at an advanced stage.”
“ARM is in positive discussions with its lenders and has conducted an agreement with its two major shareholders for certain financial support. As such, the Board is optimistic that the business of the Group will improve in 2018,” the announcement states.
ARM also advises shareholders and potential investors to be cautious when dealing with its shares.
ARM Cement PLC joins more than 10 other NSE-listed companies that have issued profit warning announcements this year.