Tanzania: Tanga six-months hit by devaluation of shilling

Tanzania: Tanga six-months hit by devaluation of shilling
17 September 2015

Tanga Cement Company has registered a net loss of TZS6.94bn- for the six months to June 2015, compared to a profit of TZS8.60bn in the corresponding period of year.

Management partly attributed the decline to the devaluation of the Tanzanian shilling during most of the period. "The devaluation of the shilling resulted in a TZS7.9bn/- unrealised foreign exchange loss...The devaluation made the loan more expensive than when it was incurred," said Lawrence Masha, chairman of the company's Board of Directors.

The company also decided to cut prices in response to increased competition. "Although sales volumes have been achieved and customers retained, the price reduction resulted in a 2.5 per cent decline in revenue compared to the same period in 2014," stated the financial report.

Apart from the implementation of price cut, also unplanned production stoppage that necessitated import of more expensive clinker contributed to 38 per cent decrease in operating profit compared to the corresponding period ended June 2014.

Fom July this year the cement firm has implemented price increases to recover the lost margin and special task team has put plans in place to improve operational efficiency and avoid unplanned breakdown.

Published under Cement News

Tagged Under: Tanga Cement Africa Results Tanzania