East African Portland Cement’s pre-tax profit for the year ending June 2007 has shot up by 20 per cent to Sh1.1 billion, from Sh924 million in the previous year.
The growth is attributed to strong market demand in the robust building and construction industry, which improved the firm’s revenues and gross profit.
The company expects to accelerate the growth in profit this year on the back of expanding economy. "With the sustained economic growth and vibrant building and construction sector, cement demand is going to be maintained at higher levels and the company expects a strong performance this year," said a financial statement signed by the secretary to the board, JLG Maonga. The operating profit increased to Sh757 million from Sh586 million, against the tide of higher costs of inputs and distribution.
Its net finance income rose to Sh47 million from Sh29 million. However, the net working capital fell to Sh1.7 billion, from Sh2 billion. The company invested Sh508 million in the year, compared to Sh137 million in the previous year.
The earnings per share nearly doubled to Sh8.49 from Sh4.58, but the volatile foreign fluctuations, fear of power rationing and rising fuel costs remain a threat to profit margins this year.
The firm’s board recommended payment in December of a final dividend of Sh1.30 a share to bring the total dividend for the year to Sh2.60.