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The Sh857million
half-year profit announced by East
African Portland Cement Company leaves
no doubt that the parastatal has finally
found its footing. The gain represents
a 138 per cent improvement in profitability
over the same period of 2004 fiscal
year, backed by improvements in plant
efficiency and utilisation, cost management
and competitive sourcing of raw materials.
Mr Ole Mapelu Zakayo,
the Managing Director, says despite
a challenging trading environment,
the company has been able to give
shareholders good returns on invested
resources. “We have deliberately directed
and controlled our processes, defined
internal controls with regular benchmarking
of our systems,” said Mapelu.
Turnover rose from
Sh2.5 billion to Sh3.1 billion against
the backdrop of a general cement demand
growth due to a robust local and regional
building and construction industry.
This contributed to a sales revenue
growth of 20 per cent over a similar
period in 2004. Net profit increased
from Sh252 million last year to Sh593
million, leading to a 135 per cent
increase in earnings.
Mr Mapelu
said the half-year results benefited
from a stable shilling against the
yen regime and consumer demand for
cement. This was, however, challenged
by the high cost of fuel oil and energy
that were on an upsurge, affecting
margins and overall profitability
of the company. He also noted that
the threat of power rationing was
going to affect performance of the
company.
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