East African Portland Cement Company has announced a steep drop in net profit for the full-year ended June attributed to a Sh1 billion fall in the re-valuation gain of its assets.
The company’s net profit for the financial year stood at Sh4.2 billion, representing a 42.1 per cent drop from the Sh7.2 billion it reported last year.
It’s investment property is now valued at Sh15.7 billion, up from the previous year’s Sh9.5 billion and Sh2.2 billion in 2014.
In the past financial year, they did not benefit from land sale proceeds as it did in 2015 when the government paid it Sh836.9 million for land acquired compulsory for the standard gauge railway project.
Additional negative hits came from total expenses which increased by Sh638 million to close at Sh3.25 billion while finance costs jumped 67.3 per cent to Sh618.1 million.
The company’s revenues for the period increased by 5.4 per cent to Sh8.9 billion but this improvement was then dampened by cost of sales which went up 692 million to Sh7.3 billion.
Portland’s drop in profitability would have been even more were it not for a tax credit of Sh411 million in the period, compared to a charge of Sh185 million it paid in the previous financial year.
The company’s swelling expenses saw it report a Sh1.6 billion loss from operations, up from the previous year’s Sh577.5 million, a pointer to the extent to which the assets revaluation helped the company.
Portland will not pay dividends for his year. “The directors do not recommend payment of a dividend in respect of the current financial year,” the cement firm said in a statement.
Portland had reported a net loss of Sh531 million for the half-year ended December 2015 compared to an after-tax loss of Sh65.3 million a year earlier.
