East African Portland Cement loss jumps 30% to Sh1.28 billion

The cash strapped East African Portland Cement Company (EAPC) has reported a 30% increase in loss to Ksh1.28 billion for the half year ended December 2018 up from the Ksh949.2 million loss it posted six months before.

In its unaudited results, the company attributes the heavy loss to increased output prices, a sluggish market and production challenges arising from the company’s tight working capital position.

“This affected the ability of the company to effectively provide the product sufficiently to all its customers. Consequently, sales revenue declined by 55% over the same period in the prior year leading to an increase of 66% in loss from operating activities,”

“Finance costs declined by 53% owing to restructuring of financing facilities. The current liabilities exceeded current assets by Ksh7.3 billion. The board is aggressively pursuing balance sheet restructuring to effectively address the negative working capital. Relevant consultations and approvals to recapitalize the business have been obtained,” read performance notes accompanying the unaudited results.

EAPC’s board however expressed optimism that the company projections that it will continue to reap from a reduction in administrative expenses driven by the ongoing staff rationalization and outsourcing of non-core administrative services will be reflected in future.

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The company which is one of the 21 state owned entities being lined up for privatization is banking on the Affordable Housing pillar of President Uhuru Kenyatta’s Big Four Agenda to boost its sales and return to profitability.

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“Future market outlook remains positive with the unveiling of the Big Four Agenda by the national government where affordable housing and manufacturing were among the top priorities. The competitive environment is expected to result in subdued cement prices in the near future,” reads the notes.