East African Portland Cement Board of Directors said its full-year net income ended June 2019 dipped to Ksh 3.3 billion compared to Ksh 7.9 billion due in large part to staff rationalization and constrained market.
Revenue for the year declined by 45 percent. It reported a reduced operating loss of Ksh 1.4 billion in the period.
• Revenue rose 8.1% y/y to KSh1.4 billion
• Cost of sales dropped 0.1% y/y to KSh1.8 billion
• Gross loss improved 26.7% y/y to a loss of Kh313.9 million
• Loss from operating activities declined by 2.5% y/y to KSh1.4 billion
• Loss before tax increased 0.8% y/y to KSh1.6 billion while Loss after tax increased 24.4% y/y to KSh1.6 billion
The cash-strapped state parastatal pinned some of its earnings decline to a constrained market which coincided with the 0onset of implementation of a restructuring program aimed at ‘optimizing cost of sales and overheads in order to reposition the company into a more competitive and profitable entity’.
In some of its units, the company said within its selling, general and administration cost decreased by 33% due to a large provision for staff related awards against EAPC which was recognized in the prior year.
“The company undertook a staff rationalization programme in the year which resulted in a reduction of Ksh 6000 million in employee expenses,” the board said.
During the period, it registered a loss of Ksh. 1.6 billion from the sale of its land holdings from a loss of Ksh. 302.2 million made in the previous year, a report by auditing firm PricewaterhouseCoopers (PwC).
The transaction included the sale of 900 acres of land to the Kenya Railways Corporation and 337 acres to real estate developer Superior Homes.
Further, it made a loss of Ksh. 233 million in its transaction with Superior Homes despite initially setting the asking price of the parcel of land at Ksh. 750 million.
The deals contributed to the cement manufacturer making a pre-tax loss of Sh2.8 billion in the review period.
The audit of the financial statements for the year ended 30 June 2019 by the external auditor is not complete pending the appointment of the Auditor-General.