Tanga Cement Plc has published results for for the half year ending June 30, 2019.
The Dar es Salaam Stock Exchange-listed company said the results were largely aimed at damage control after it had earlier published a cautionary notice advising its shareholders that it expected a drop in its operating profit.
“The company’s sales revenue declined by only 1 percent (from Tsh98.9 billion to Tshs97.6 billion) in the first half of 2019 compared with the first half of last year, and it was able to sustain a healthy gross profit margin of 26 per cent for both period”, said the board chairman Lawrence Masha.
Mr Masha attributed the drop to market headwinds in an increasingly competitive cement sector coupled with additional depreciation expense triggered by the adoption new IFRS 16 accounting standards on leases.
In October the company, which trades under its Simba brand name, published a cautionary notice advising its shareholders that it expected its operating profit for the first six months of 2019 to be “between 112 and 122 per cent lower than that of the comparative period for 2018.”
“Tanga Cement Plc also expects that its loss per share for the period ended June 30 will be between Tsh157 (6.8 US cents) and Tsh167 (7.2 US cents), which is between 461 per cent and 496 per cent lower than its loss per share for the six months ended June 30, 2018,” the notice signed by Mr Masha warned at the time.
A review of its unaudited financial statements for the period shows that the cement maker recorded a loss before tax of Tsh12.9 billion and net loss after tax of Tsh10.2 billion in the first half of 2019, compared to a Tsh1.8 billion loss before tax and Tsh1.8 billion net loss after tax during the comparative period for 2018.
Cash generated from trading activities improved by 17 per cent from Tsh16 billion in 2018 to Tshs18.8 billion in 2019, while cash flows from operations also improved by 33 per cent from Tsh14.3 billion to Tsh19.1 billion during the same period.
Mr Masha added that the company has invested in additional ‘once-off’ expenses to expand and improve its sales, logistics and distribution services to customers in the long term to “yield the desired returns for the remainder of the year (2019).”
The cement maker did not declare interim or final dividends to shareholders for the period.
Founded in 1981, Tanga Cement is 62.5 per cent owned by Afrisam Mauritius and with a market capitalisation status of Tsh38.2 billion.
Its current cement production capacity is measured at just over 1.25 million tonnes a year.