Kenya, November 8, 2017 – The East African Portland Cement Company (EAPCC) has posted a net loss of Ksh1.47 billion for year ended June 30, 2017.
This is a contrast of the Ksh4.15 billion profit the company made in the 2015-16 financial year.
The Nairobi Securities Exchange listed company on Tuesday also reported a 22 per cent revenue drop during the period.
Its revenues closed at Ksh6.93 billion, compared to Ksh8.87 recorded in a similar period last year.
The company has blamed the drop and loss to “production challenges and downward pressure in retail prices, due to excess supply” in the market.
The cement manufacturer however reduced its operating cost by about Ksh300 million, recording an operating loss of Ksh1.3 billion, down from Ksh1.6 billion last year.
EAPCC has in the recent times faced increased competition from new market entrants and imports, which has pushed cement prices downwards.
In its financial statement published on behalf of the board by company secretary Sheila Kahuki, the firm said the management has reconfigured the distribution system, to strengthen the various sales channels to respond to customer requirements.
“The growth of construction sector is strong with cement demand expected to remain high, driven infrastructure projects and growing real estate sector. However due to the current excess capacity that exceeds demand, the downward pressure on cement prices is projected to prevail,” the statement reads in part.
The price effects are expected to be felt is both short and medium term.
“The company is focusing on volume growth, production improvement and cost containment measures to impact positively on the company performance,” it said.
The board said the company is in the process of restructuring its operations in order to enhance its competitive position.
EAPCC ended the 2016-17 financial year with total assets worth Ksh27.35 billion, a drop from Ksh27.73 billion in June last year.
The company however recorded foreign exchange gains of Ksh134 million, a turnaround from a Ksh305.7 million loss made last year.
EAPCC managing director Simon Peter Ole Nkeri said company remains focused on increasing its sales volumes, curb losses and stabilize its revenues.
By Martin Mwita