Tanzania: Tanga Cement suffers profit decline

Tanzania: Tanga Cement suffers profit decline
12 April 2016

Tanga Cement Co Ltd's 2015 profit fell to TZS8.24bn (US$3.774m) compared to TZS28.40bn (US$13m) in 2014, according to the national paper the Daily News. The audited financial results state that the group experienced a decline in sales revenue of 9.9 per cent to TZS209.11bn compared to TZS232.10bn in the preceding year.

The fall was mainly attributed to the increased competition from new entrants to the market which put downward pressure on sales prices and volumes.

In addition, at the macroeconomic level, the cement firm witnessed a significant devaluation of the local currency to the US dollars in excess of 20 per cent. The producer also pointed towards losses on the foreign exchange amounting to TZS9.97bn in the year under review compared to TZS3.65bn of the year before.

Similarly, the cement company experienced setbacks in terms of overall equipment efficiencies and some unplanned equipment failures during the year under review. The unavailability and poor quality of electricity supply from the national utility remains a major challenge for equipment efficiency, which resulted in the importing of more expensive clinker and this negatively impacted on the cost of production of cement.

However, the company commissioned its second kiln for the first time in December 2015. The project was concluded within the approved capex budget of US$152m.

“We expect market conditions to remain challenging in the coming year but the management is confident that the initiatives will yield positive financial returns,” stated the report. “A number of critical infrastructure projects have been approved by the government funded by both sovereign foreign direct investments and private investors and these are most likely to increase demand for our products.”

Published under Cement News

Tagged Under: Tanzania Tanga Cement