Cement maker East African Portland Cement Company (EAPCC) has sunk further into troubled waters after it booked a Sh1.6 billion loss for the six months to December last year, compared to the Sh1.3 billion loss it recorded in the same period in 2018.
The firm’s revenues rose by eight per cent to Sh1.48 billion from Sh1.37 billion recorded in 2018 in a period that the company said was marked by low selling prices. The company’s operational losses, however, reduced by 2.1 per cent to Sh1.38 billion from the previous Sh1.41 billion.
The cost of production fell 0.5 per cent to Sh1.79 billion, from Sh1.8 billion. However, the State-owned entity suffered a setback after administration and selling costs rose by 6 per cent to Sh1.07 billion from Sh1.01 million.
According to the firm’s unaudited results, finance costs rose by 24 per cent to Sh253 million from Sh204.7 million.
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Staff redundant
This was worsened by redundancy costs totaling Sh281.9 million. In August last year, the firm fired its entire workforce on account of unsustainable operations. Some 600 employees were, however, rehired on new terms, which included a 40 per cent cut on their previous pay.
“Total assets reduced by 4 per cent due to reduction in other receivables,” said the firm in a statement.
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The board is, however, optimistic of returning to profitability in the short-run after implementation of the company’s medium-term plan. And like many State entities, the firm delayed releasing its results in what is attributed to lack of Auditor General.
EAPCC last year sought shareholder approval to sell some 2,000 acres of its prime but idle land to save it from being auctioned by KCB Group over a Sh5.4 billion loan. The cash was expected to meet working capital needs as well as funding of other costs.
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