TANZANIA Portland Cement Company (TPCC), has retained its market dominance, despite increasing competition in the cement industry thanks to stable performance in first half of this year.
TPCC, the market leader trades as Twiga Cement, managed to maintain a more or less stable performance in H1 after net a result net profit decreased slightly by 1.0bn/-to 26bn/-while operating profit stood at 38bn/-.
Tanzania Securities Limited (TSL) said on its Twiga Cement Commentary that the stable performance during H1 demonstrate the firm market dominance, despite increasing competition.
“TPCC recorded stable performance for the first half of the year 2019, with most of its margins remaining flat,” TSL said in a statement.
The brokerage firm attributed the stable performance to the firm location which being in the major commercial city of Tanzania— Dar es Salaam—helps it in solidifying its position as a market leader.
“[Also] increasing demand for cement, especially from government related projects such as construction of the standard gauge railway, is going to bolster revenues of cement companies for the foreseeable future,” the commentary, issued yesterday, said.
The statement said at the bourse Twiga stock remained liquid from the beginning of the year, recording a closing price of 2,000/-per share by the end of June, the same as it was in early January.
“The stock’s performance was commendable given that most of the other listed companies whose shares are actively traded on the Dar es Salaam Stock Exchange (DSE), experienced price declines,” TSL said.
The relatively good performance, the brokerage firm said, was testimony to Twiga’s strong fundamentals supported by the dividend payout of 290/-per share as at the end of this June.
Twiga has the market capitalization of around 371bn/-. Twiga gross profit margin decreased slightly to 38 per cent from 40 per cent in the corresponding half year that ended last June.
Operating profit margin and net profit margin remained flat at 25 per cent and 17 per cent respectively. Return on Asset (ROA) and Return on Equity (ROE), declined marginally to 9.0 per cent and 13 per cent from10 per cent and 14 per cent respectively.