Tanga Cement's net profit dropped 32 per cent, with the cement
manufacturer blaming the fall on depreciation of the shilling, erratic power
supply and rising costs of imported clinker.
The company, trading on the Dar es Salaam Stock Exchange as Simba Cement,
saw its net profit falling to 21.93bn/- last year from the previous year's
32.2bn/- despite positioning itself well to meet the raising cement demand in
the region.
The Simba Cement board of directors' acting Chairperson Prof Samuel
Wangwe said the growth in sales revenue was offset by sharp increase in the
cost of sales when compared to 2010.
"This was largely due to a major refurbishment of the plant,
resulting in a higher than normal proportion of imported clinker being used in
the manufacturing process during the first quarter of the year," Prof
Wangwe said.
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| Prof Wangwe |
The economics professor added: "This was further aggravated by a
substantial increase in energy costs and by difficulties encountered due to the
unreliable supply of electricity."
The firm saw earning per share dropping to 344/- from 506/- during the
previous year while full year dividend declined to 86/- from 247/-. The 3bn/-
set aside for dividends, according to the acting Chairman, is 25 per cent of
net profit after tax and the Board recommended a final dividend of 47/- per
share.
Prof Wangwe said in a statement that depreciation of the shilling also
impacted negatively on the company's financial performance, as a significant
proportion of costs were incurred in foreign currencies. Revenues grew to
161.44bn/- during the year under review from the previous 149.2bn/-.
"Although slightly lower than the growth achieved in previous
years, sales volumes and revenues increased in line with market demand,"
said professor Wangwe.
Simba whose shares traded on the bourse at 2,380/- on Thursday is
reported to have positive outlook because of expected growth in demand for
cement in the region.
"In anticipation of expected growth within the construction
industry, the company has prepared itself to meet the increased in
demand," Prof Wangwe said, adding that the goal will be achieved given its
reputation for high quality and excellent distribution network.
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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