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By NATION Correspondent
East Africa Portland Cement is looking for ways to increase profit by converting a Japanese loan into local currency.
The loan, guaranteed by the Government in 1990, is payable in the yen. It was advanced by the oversees Economic Co-operation Fund of Japan to capitalize the cement firm, where the Government is the main share-holder.
The conversion is planned for next financial year. The news was revealed during the annual general meeting yesterday at the firm's Athi River sports club.
Chairman Benson Ndeta said:”The presence of the yen-denominated loan continues to expose the company. The board is looking for ways of addressing this by converting it into a Kenya shillings loan”.
This, he said, would be done either by selling the loan to a local bank or issuing bonds to pay it off.
The loan, which was guaranteed by Government, is payable in yen
According to the board, the loan is the reason the company has not paid interim dividends, which is the done thing in other companies.
During the meeting, the company approved payment of a final dividend of Sh2.50, a 43 per cent increase from last year's Sh1.75. The rise was a result of the return to profitability after recording a loss of Sh391 million last year.
This year, the company recorded a pre-tax profit of over Sh1 billion, attributed to a reduction in overhead costs and an increase in sales.
“A stringent financial discipline allowed us to register impressive results during the year, with a pre-tax profit of Sh1.08billion.
“This was achieved in spite of an increase in operating costs related to energy, transport and raw material,”said Mr Ndeta.
He said the company hoped to strengthen its grip on the existing market and expand into the emerging regional markets, notably Southern Sudan and Rwanda . |
