East African Portland Cement, Kenya, slid into losses with a Sh269 million posting for the year to June 30, 2004. Audited results released by the cement manufacturer yesterday indicate that the Athi-River based company can take some solace in the fact that the residual loss was made largely on the back of a hefty Sh637 million exchange loss on a yen-denominated loan. EAPC’s earnings position was further eroded by a Sh111 million exceptional item , believed to have been the direct result of a deficit that developed from a re-valuation of its employees’ retirement benefits scheme. Even then, the firm - which accounts for 38 per cent share of the Kenyan cement market compared to Bamburi’s 57 per cent and Athi River Mining’s five per cent - was able to achieve solid growth in the top-line and its immediate vicinity. Operating profit was up an impressive 159 per cent to Sh441 million.
Despite operating in a highly competitive market that has seen much action from local peers and the influx of cheap imports from Asia and Comesa FTA (Free Trade Area) countries like Egypt, EAPC was able to grow its turnover by a scanty, but symbolically significant, eight per cent, to Sh4.1 billion. This was attributed to stable market conditions in the local market and some quantum of growth in the Ugandan cement market.
Last year, EAPC, under the then managing director Emmanuel Charo, was criticised by market-leader Bamburi’s top guns, after it orchestrated a vicious price war against the latter, marked by aggressive incentives to some of its key distributors. EAPC’s board has recommended a first and final dividend of Sh1.75 per Sh5 ordinary share, which translates into a 35 per cent take.