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Tanzania’s Tanga Cement posts 6% net profit growth

World Cement,


Despite the challenges and issues, which faced the company last year, Tanga Cement Company recently reported a net profit of TZS32.2 billion, a growth of 6% from the 2009 TZS30.4 billion figure.

The past year in Tanzania has seen the removal of suspended import duties and the impact on the increased importation of cement, alongside a deteriorating power supply and poor infrastructure.

Experts are asserting that Tanga’s positive performance on the Dar es Salaam Stock Exchange is a good sign that its shares are also faring well.

Moremi Marwa, the chief executive officer at Tanzania Securities has said the challenges in the cement industry could have slowed the company’s profitability. This comment was in relation to the published weekly market commentary, where the key indicators amongst other companies were high margins, underlying sales growth, strong cash flow, above average earnings, yields and dividend payouts.

Simba Cement’s revenue grew by 24%, according to recent financial results, from last year’s TZS119.9 billion to TZS 149.2 billion. Earnings per share increased to TZS506/share from TZS478/share in the last year. The company’s dividend payout has as a result of this now been increased to TZS247/share – a 38% boost from last year’s TZS179/share.

Marwa added, “the dividend payout represents a yield of 13% given the current market price of TZS1920/share. In line with our earlier analysis and forecast, Simba Cement is currently trading at a price earning ratio of 3.79.”

Tanzania Securities forecast earlier that the listed stocks at the DSE are underpriced in comparison to other regional competitors. Meanwhile, the DSE all-share index made a turnaround yesterday to appreciate by 1.16% closing the session at 1174.72 points.

Last Friday, the DSE index dropped to a significant low of 15.42% and fell to 1172.67 points. The index was pulled down after the Nation Media Group (NMG) price dropped by over 13% to 3100/share from 3600/share.

Read the article online at: https://www.worldcement.com/africa-middle-east/17032011/tanzania%E2%80%99s_tanga_cement_posts-_percent_net_profit_growth/

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