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East African Portland Cement Company (EAPCC) today announced a profit of Sh857 million for the half-year ending December 31, 2005 up from Sh360 million in a similar period in 2004. The profitability represents a 138-percentage upsurge and was driven by improvements in plant efficiency and utilization, cost management and competitive sourcing of raw materials.
Managing director, Mr. Ole Mapelu Zakayo said despite a challenging trading environment, the company was 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 Sh2.5billion to Sh3.1 billion on the back 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 percent over a similar period the previous year. Net profit increased from Sh252 million last year to Sh593 million, leading to a 135-percentage increase in earnings.
Mapelu said that the half -year results benefited from a stable shilling against the yen regime. “ The shilling has continued to strengthen against major international currencies especially the Japanese yen resulting in an exchange gain of Sh364 million as opposed to a loss in the preceding year.” EAPCC has had to deal with efforts to control its biggest challenge – a yen dominated loan used to expand cement production a decade ago. This has continued to pose significant exposure to the future profitability of the company.
Mr. Mapelu said that the economic growth achieved in the country had translated into increased 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 the performance of the company.
“ The looming power rationing regime will potentially exacerbate the quantity & quality of power. We expect as a direct consequence; a narrowing of margins, and a higher cost of production environment,” said Mapelu. He however said that the company would continue to challenge all operational practices with a view of streamlining and improving efficiencies in the entire business chain.
The board of directors has recommended an interim dividend at the rate of 26% or Ksh.1.30 per ordinary share of Ksh.5 each. This is a major improvement against a nil interim dividend for a similar period in 2004.
Click here for the half year financial report
For Further Information, please contact:
David Maingi
Corporate Affairs & Public Relations Manager
East African Portland Cement Company Limited.
Athi River off Namanga Rd.
P.O. Box 40101 - 00100, GPO, Nairobi
Tel: (254) 045-20627, 22777
Fax: (254) 045-20406, 22378
Email: dmaingi@eapcc.co.ke
http://www.eastafricanportland.com
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