East African Portland Cement reports loss, issues profit warning

East African Portland Cement reports loss, issues profit warning
Published: 02 March 2012

East African Portland Cement Co (EAPCC) announced a first half loss of KES88m on high production costs and increased competition.

For the current year the company has issued a profit warning as producers such as Mombasa Cement and National Cement enter the market. “The board of directors expects that the company’s earnings for the year will be at least 25 per cent less than the level of earnings achieved in the previous year,” the company said in a statement.

Increased competition saw EAPCC’s sales volumes fall by eight per cent in the six months to December which led to a six per cent drop in revenues to KES4.9bn compared to KES5.2m a year earlier.

The firm failed to operate in the last two months of 2011, following boardroom wrangles that turned into full industrial action by workers, paralysing all operations.

“The unexpected major plant breakdown in November 2011 and disruptive events of December 2011 led to the reduced growth momentum experienced in the period under review,” said the statement said.