The Dar es Salaam, Tanzania, stock exchange-listed company said the results were largely aimed at damage control, after it had earlier published a cautionary notice advising its shareholders that it expected a drop in its operating profit.
"The company's sales revenue declined by only 1% (from TSH 98.9 billion to TSH 97.6 billion) in the first half of 2019 compared with the first half of last year, and it was able to sustain a healthy gross profit margin of 26% for both periods", said the Board Chairman, Lawrence Masha.
Masha attributed the drop to market headwinds in an increasingly competitive cement sector, coupled with additional depreciation expense triggered by the adoption of new IFRS 16 accounting standards on leases.
In October, the company, which trades under its Simba brand name, published a cautionary notice advising its shareholders that it expected its operating profit for the first 6 months of 2019 to be "between 112% and 122% lower than that of the comparative period for 2018."
"Tanga Cement Plc also expects that its loss per share for the period ended 30 June, will be between TSH 157 (US$0.06) and TSH 167 (US$0.07), which is between 461% and 496% lower than its loss per share for the 6 months ended 30 June 2018,” the notice signed by Masha warned at the time.
A review of its unaudited financial statements for the period shows that the cement maker recorded a loss before tax of TSH 12.9 billion and net loss after tax of TSH 10.2 billion in the first half of 2019, compared to a TSH 1.8 billion loss before tax and TSH 1.8 billion net loss after tax, during the comparative period for 2018. Cash generated from trading activities improved by 17% from TSH 16 billion in 2018 to TSHs 18.8 billion in 2019, while cash flows from operations also improved by 33% from TSH 14.3 billion to TSH 19.1 billion, during the same period.
Masha added that the company has invested in additional one-off expenses to expand and improve its sales, logistics and distribution services to customers in the long term to "yield the desired returns for the remainder of the year (2019)."
The cement maker did not declare interim or final dividends to shareholders for the period.
Read the article online at: https://www.worldcement.com/africa-middle-east/04112019/tanga-cement-announces-financial-results/