Dar es Salaam. Tanga Cement Company Limited, which trades as Simba, may soon return to its profitable past if its newly published financial statements have anything to write home about.
Last year, Simba Cement posted a net loss of Sh26 billion.
But in what symbolises that the Dar es Salaam Stock Exchange-listed company was poised to regain its lost glory, its loss before tax dropped to Sh1.8 billion during the first half of 2018 from Sh19.4 billion in a similar period in 2017.
“The net loss after tax for the six months to Sh1.8 billion is a significant improvement from the net loss of Sh14.6 billion recorded in the first half of 2017,” the company’s financial statement reads.
Simba Cement’s operating profit for the first six months of 2018 reached Sh6.7 billion. That was a 248 per cent improvement from an operating loss of Sh4.3 billion for the comparative period in 2017.
Cash flows from normal trading activities improved to Sh16 billion from Sh7 billion for the same period in 2017 due to improved profitability. Speaking during the company’s recent annual general meeting (AGM) in Dar es Salaam, the company’s chairman, Mr Lau Masha said the management had put in place a clear turnaround plan that will see the company returning to profitability in 2018.
“Our interim half year results will be published in the coming two weeks….They will show you a clear picture of how our turnaround plan is working….We remain very optimistic that we will return to profitability in 2018,” Mr Masha told shareholders at the company’s 24th AGM in Dar es Salaam recently.
Tanga Cement’s performance has not been impressive for the past two years. In 2016, it registered a net profit of only Sh4.3 billion from Sh8.2 billion in 2015.
The Sh26 billion net loss in 2017 was primarily attributed to competition in the market which resulted in relatively lower cement prices, Mr Masha said.
Other factors behind the loss include selling and administration expenses and costs associated with repayment of the dollar-denominated term loan that was spent on commissioning of a second integrated production line.
The factors outweighed the impact of a three per cent rise in sales in the Tanga based cement maker’s balance sheet.
The company’s managing director, Mr Reinhardt Swart said at the recent AGM that the rolling out of major infrastructure development projects across the country will yield positive results to Tanga Cement during the coming years.
“Projects such as the oil export pipeline from Uganda through Tanga in Tanzania. The Standard Gauge Railway and the Dar es Salaam and Tanga port upgrades are gaining momentum and anticipated to boost demand for cement in Tanzania over the next five years,” he said.