For the first time in recent years, cement maker Tanga Cement Company Ltd has announced a fall in net profit, resulting in dropped earnings per share.
Net profit after tax declined by 16 per cent to Tsh12.8 billion ($9.8 million) from Tsh15.2 billion ($11.7 million), resulting in dropped earnings per share from Tsh238 ($0.18) to Tsh201 ($0.15).
Charles Naude, the chairman of Tanga Cement said that the six months ended June 2009 was a challenging period for the firm, blaming the reduction in profits on cement imports as well as a decline in the regional markets in which the company operates.
Mr Naude said that due to the company’s ongoing expansion project for the new cement grinding unit, the board of directors has agreed not to pay interim dividend this year.
"The cost of sales were lower than expected due to the lower levels of sales and production as well as improvement in operating efficiencies, and better thermal energy consumption following completion of various plant modernisation projects last year," he said.
Considering the uncertainties of the current economic climate and the effect of the increase in imports as well as stiff competition from the local market, the firm cautioned investors that while the company is taking steps to improve its market position, it expects only a marginal improvement in results during the second half of 2009 compared to the first half of this year.