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Tanzania Oil & Gas
Picha

No dividend to Tanga Cement shareholders, three years in row

FOR three years in a row, Tanga Cement shareholders will not receive dividend from 2018 profit despite improved performance as the company continues to service its huge debt.

The Board Chairman, Lawrence Masha told shareholders at the Annual General Meeting in Dar es Salaam over the weekend that the decision to announce no dividend was reached to the company footing its 152 million US dollars debt used to finance construction of its second integrated production line in 2016.

“We made investment... and it was not small investment, we’re waiting for a return of profit,” said Mr Masha after one shareholder, George Chombo from Tanga, asked why there was no dividend for three years in a row.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), for the Dar es Salaam Stock Exchange listed Tanga Cement, which trades as Simba Cement, improved by 30 per cent in 2018 to 34.4bn/-from 8.5bn/-in 2017 thanks to improved sales volumes, margins and operational efficiencies.

Gross profit for the year improved by 91 per cent to 56.2bn/-from 29.4 billion achieved in the prior year.

It posted an operating profit of 14.9bn/-in 2018 from an operating loss of 10.99bn/-in 2017. The 2018 performance had helped to reduce after tax loss to 11.3bn/-in 2018 from 26.3bn/-.

The company decided not to declare an interim dividend to shareholders for 2018 in line with the financial performance for the year.

“Having regard to the net loss after interest on loans and tax for 2018, the board had decided to be prudent by not declaring a final dividend for the 2018 financial year.

Available cash resources will be committed to the operational and debt service commitments,” said the board chairman, who is former Home Minister. “We have 152 million US dollar loan incurred to finance our second kiln.

Looking at the financial results the company is no longer making losses. But as a Board we saw that we need to repay our loans so as to maintain our capital and enable the investment to make significant profit”.

“Looking at the financials, we are doing better. We are bullish about future prospects because we have a strong base,” said Mr Masha.

The shareholder from Tanga, Mr Chombo had queried what was the problem with the company and whether there were operating costs had been inflated. “Are there unnecessary overheads? Is there something wrong somewhere?... For three consecutive years we do not get dividend! That is very serious,” he lamented.

A representative of some institutional shareholders, Hadija Mwinyi asked about strategies laid down to boost profit and enable the company to announce dividend to its shareholders.

The Board Chairman said it was the intention of the board to ensure a return to investment but they had to meet their debt obligation. He said they would like to ensure their shareholders that their monies were in safe hands because the company was being run well.

The Managing Director, Reinhardt Swart said their focus was on long-term investment that was why they incurred 152 million US dollar loan to commission their second kiln.

“We have to take a longterm view of the investment. It (the second kiln), was not small investment. It big and we have to be patient,” he told reporters after the meeting.

THE Rukwa Regional Commissioner (RC), Mr Joachim Wangabo, ...

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Author: By DAILY NEWS Reporter

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