This archive report was first published on 29 October 2021.
Friday, October 29, 2021, marked a significant turnaround for East African Portland Cement Plc (EAPC) as the company posted a Sh1.8 billion net profit in the year ended June.
The profit was largely attributed to gains in the company's land holdings and a larger tax credit, which more than offset the losses incurred from normal operating activities.
Despite a rise in sales to Sh2.7 billion from Sh2.4 billion, other expenses, including production costs, increased by a larger margin, resulting in losses from normal operating activities.
The company's operating loss increased to Sh3.2 billion from Sh3.1 billion, a reflection of the competitive cement market where private firms are growing their market share on the back of cheaper pricing and increased investment in capacity expansion and product diversification.
Portland Cement's return to profit is a welcome development, especially considering the company's history of underfunding and the proposal to recapitalize the company by selling part of its large land holdings.
However, the company did not declare a dividend for the period, extending the multi-year payout drought.
