Dar es Salaam. Tanga Cement Company Limited (TCCL) shareholders will not receive dividends for the third consecutive year as the company focuses on servicing loans borrowed to install the second clinker plant. Speaking during the company’s annual general meeting in Dar es Salaam over the weekend, chairman Lawrence Masha called for shareholders to be patient as the benefits of investment would take more than ten years.
He said the company has invested to the tune of $152 million to install the clicker plant of which $100 million was borrowed from PIC-South Africa and the remaining was raised by the company from its own retained fund.
“The company is performing well, but what we have agreed at the board is to stop paying dividends to service the loan to clean up our balance sheet,” the chairman said.
He said the outlook is positive as last year, the TCCL group recorded a positive trend on operating profit from losses in 2017.
“We invested and what we are waiting for is return of investments,” Mr Masha said on the sideline of the meeting.
The company annual report for 2018 has shown that the company recorded an operating profit amounting to Sh15 billion from a loss of Sh12.6 billion in 2017 while at the group level, operating profit was Sh15.1 billion from a loss of Sh12.6 billion.
The rise of the TCCL Group operating profit was a result of an increase of other incomes, reduction of some expenses and increase of gross profit.
The company also managed to cut annual loss to Sh10.7 billion last year from Sh27 billion recorded during the previous year while at the Group level, annual losses also slowed to Sh11 billion from Sh26 billion.
Basic loss per share also went down to Sh179 in 2018 from Sh418 respectively.
Shareholders who attended the meeting asked the company to continue implementing cost cutting measures in order to maximize income and future profit.
Khadija Mwinyi from the National Social Security Fund (NSSF), which controls 1.8 per cent of the company’s stake said the “no dividends” declaration has adversely affected their investment income projections.
The company’s managing director, Mr Reinhardt Swart, said rising demand for cement, improved rail transport from Tanga to Kilimanjaro, improved market confidence and increase of exports market demands raises future prospects of the company.
He said that, despite the reduced cement prices, sales volumes have continued to rise at a time when the government is implementing major infrastructure projects.