Kenya: EAPCC issues profit warning

Kenya-based East African Portland Cement Co (EAPCC) expects its profit to fall by more than a quarter in the financial year ending June 30 citing year-earlier gains on land sales, Reuters reported yesterday.

"The unrealised fair value gain on investment property and the gain on disposal of land will not recur this financial year," EAPCC said in a statement.

The company's pretax loss widened to KES745.02m (US$7.33m) in the first half on higher finance costs and foreign exchange losses.

EAPCC has foreign currency-denominated debt, meaning it faces higher repayments when the shilling weakens.

It said demand for cement was expected to remain strong due to numerous, ongoing infrastructure projects but cautioned that an oversupply in the local market would weigh on prices in the short- to medium term. In response, EAPCC said it would control costs and expected a technical support agreement it has entered into with Lafarge Holcim to boost its operations.