Dar es Salaam. Tanga Cement Plc’s net loss ballooned by 50 percent during the first-half of the current calendar year as a major breakdown in production units pushed costs of production through the roof.
Sh2.6 billion loss - equivalent to 50 percent - was the result of a major breakdown in production units that pushed costs of production to the roof.
According to the issued audited results for the six months to June 30, 2021, Tanga Cement registered a net loss of Sh7.8 billion during the six months to June this year: up from the Sh5.2 billion loss that was recorded in the same period last year.
The chairman of the firm’s board of directors, Mr Lawrence Masha, said the financial woes were a result of the major repairs and maintenance on the clinker production units which resulted in an increase in total costs.
Clinker is the backbone of cement production. It is essentially a mix of limestone and minerals that have been heated in a kiln and have been transformed by this heat.
Mr Masha said due to the breakdown the company had to outsource and purchase 117, 259.19 tonnes of clinker during the said period to ensure sufficient cement production and supply to customers.
“The Group’s cost of sales increased by 28 percent over the comparative period to June 2021,” said Mr Masha.
The significant increase in the costs subdued the company revenue which rose to Sh107.15 billion from Sh94.32 of last year’s.
The company’s financials indicated that by June this year the group’s total costs of sale was Sh89.21 billion from Sh69.88 billion of June 2020.
As per the chairman’s statement, shareholders would not get dividend, as the board decided that the available cash will be directed to operational and debt services commitments.
The company’s financial position did not also favour dividends for the 2018 and 2019 years as well.
However, Mr Masha says, it is expected that government initiatives will spur economic growth through infrastructure development - and, thus, promote local industries through boosting local cement output and consumption while reducing the influx of cheap imported cement.
“With Tanzania remaining a significant player in the East African construction market, cement output is anticipated to increase and Tanga Cement is well positioned to take advantage of the growth opportunities in the regional market,” said Masha.
Stocks for the Tanga Cement Public Limited Company (‘’Tanga Cement’’ or the ‘’company’’) listed at the Dar es Salaam Stock Exchange (DSE) is currently traded at Sh535 per share.