EAPCC Kenyan based cement manufacturing and selling company announced its half year results for the six month period ended December 31 2016.
Key takeaway points are:
- •Revenue reduced by 19.4% from Ksh 4.6 Billion in a similar period in 2015 to Ksh 3.7 Billion in 2016. The company attributes this fall in revenue due to a 17% drop in sales volumes as a result of stiff competition in the industry.
- •Gross Profits declined from Ksh 853 million in 2015 to Ksh 647.5 million in 2016 however cost of sales was still contained in proportion with the decrease in sales volumes.
- •Foreign Exchange gains of Ksh 186 million was recorded compared to a forex loss of Ksh 187 million in 2015.
- •Finance costs increased by 9.8% from Ksh 279.68 million in 2015 to Ksh 307.31 million in 2016.
- •Loss before tax stood at Ksh 533 million in 2016 compared to a loss of Ksh 745 million in 2015.
- •No interim dividend was declared.
From the company’s statement, it expects a general decline in demand for cement due to election uncertainties, general decline in the manufacturing sector and near completion of major infrastructure projects. EAPCC maintains that supply will continue outstripping demand having an impact on pricing in the short to medium term.
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The company is addressing the current challenges by restructuring programs that will reduce the high finance and administration costs and stabilization of the value chain processes in order to enhance efficiency and the company’s competitive position.
In the markets EAPCC share price is at Ksh 30.00 and is currently trading at 10 year historical low levels in fact it touched a 10 year low of Ksh 20.25 in September 2016 (10 year chart below).
Download: EAPCC Ltd- Unaudited Results for the Six Months Ended 31 Dec 2016
Source: (East African Portland Cement, FT, Kenyan Wall Street)