Portland Cement loss widens to Ksh.3.4 billion
East African Portland Cement Company (EAPC) has posted a Ksh.3.4 billion loss for the year ending June 30, 2019, returning to loss making after an year’s break in fortunes.
The cement manufacturer has been facing tough times in the face of a declining construction sector registering poor sales amounting to Ksh.4.1 billion from Ksh.5.3 billion an year before.
As such, the company’s revenue dropped by 46.2 per cent to Ksh.2.8 billion from Ksh.5.2 billion in 2018. Last year, the firm posted a Ksh.7.9 billion profit after its land revaluations resulted in gains of Ksh.11.3 billion. However, the gains on land turned into a loss in the year to June as the firm shed off Ksh.233.2 million from the devaluation of land holdings in the period.
Moreover, EAPC’s solvency position has deteriorated further with current liabilities surpassing current assets by Ksh.10.2 billion from Ksh.6.1 billion last year. Last year, the cement company undertook a cost optimization and restructuring program that saw 33 per cent savings on general and administration costs with employee wages falling by Ksh.600 million. Further EAPC dispatched land worth Ksh.1.4 billion to help boost its liquidity position to cover operations in the near-term.
Early last year, EAPCC found itself between closing walls as part of its creditors including KCB sought to attach themselves to the company’s property over arrears.
In August, the cash-strapped manufacturer declared all its position redundant as the company faced an unprecedented cash-crunch.
The East African Portland Cement has been anchoring its potential bounce back on the sale of its massive land holdings in Athi River tabulated at 14,000 acres.
EAPC valued its land parcels at Ksh.27.2 billion in its published 2018 Annual Report.