EAPCC PLC Posts a KES 1.3 billion Loss for 1H2019
East African Portland Cement Company has reported an after-tax loss of KES 1.3 billion for 1H2019 compared to a loss of KES 1.0 billion loss in H1 2018. The company attributed the weaker financial performance to a difficult business environment, increased input prices, a sluggish market and production challenges arising from a tight working capital position.
Revenues fell by 55.2% y/y from KES 3.1 billion to KES 1.4 billion resulting in a gross loss of KES 428.0 million and consequently, a negative gross margin of 31.2% from a positive gross margin of 4.7% in 1H2018. The company registered an operating loss of KES 1.4 billion from a loss of KES 854.4 million in 1H2018.
Current liabilities exceeded current assets by KES 7.3 billion placing it in a negative working capital position.
The company is currently undertaking staff restructuring and outsourcing of non – core administrative services which is expected to lower administrative expenses. Although the company has maintained a positive outlook based on the government’s Big Four Agenda (particularly around infrastructure development), we opine that the company’s current financial and operating conditions will remain a big handicap in exploiting any opportunities that may arise.
Share Price Trend
The company’s share has been for the most part on a downward trend reflecting its weak fundamentals.