Portlands profits rise but key revenue drivers drop
EAST African Portland Cement has recovered from loss making to post a Sh327 million half-year profit after tax helped largely by forex gains, lower costs and favourable finance costs.
The cement maker, which made a Sh376 million loss in the half-year of 2011, saw revenues falling eight per cent to Sh4.5 billion, down from Sh4.9 billion in 2011.
The firm's cash generated from operations, an item indicating the cash a company brings in from ongoing, regular business activities, dropped four times to Sh157 million, down from Sh693 million the other year.
Managing director Kepha Tande said the revenue drop resulted from extended recovery of market share. He however said the company is now on a good footing and targets to increase the share of the market to 25 per cent by the end of this year, up from 21 per cent now.
Portland however managed to control its expenses with cost of sales dropping from Sh4 billion to Sh3.2 billion. The company also saved Sh200 million in administration and selling expenses on the back of lower transport and advertisment costs.
The company recorded Sh145 million as forex gains from its Yen denominated loan and said it has converted half of the 20-year credit into dollars to shield itself from foreign exchange fluctuations.
Industrialisation PS Cyrus Njiru said the company has put its ugly past behind and is now poised for growth. The company last year witnessed strikes and a string of court cases arising from management squabbles.