DAR ES SALAAM: TANZANIA Portland Cement Public Limited Company’s net profit has plummeted by 38.17 per cent in the year ending 30th June 2024, reflecting severe challenges from a significant drop in sales revenue and escalating selling and marketing costs.
The company’s latest financial statement, released on Wednesday reveals a sharp decline in profit after tax, which fell to 30.9bn/- for the year ending this June down from 50bn/- for the corresponding period last year.
Sales revenue also took a hit, dropping 18 per cent year-on-year from 246.3bn/- in the year ending last June to 201.5bn/- .
Twiga Cement Chairman, Hakan Gurdal, said that the decline was due to adverse weather conditions and delayed projects caused by funding shortages in the first half of the year, which led to a market contraction.
“The first half of the year presented a challenging market environment, characterised by unfavorable weather conditions and projects being on hold due to lack of funding.
“This resulted in a market shrinkage compared to the previous year,” said Mr Gurdal in the statement.
Sales and marketing costs increased by 15.86 per cent, rising from 1.45bn/- last year to 1.7bn/- this year, according to the financials.
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The company successfully reduced its cost of sales by 8.24 per cent, from 166.2bn/- in the previous year to 152.5bn/-thanks to significant advancements in operational efficiency, such as more effective use of clinker, utilisation of alternative fuels, reduction in CO2 emissions and lower maintenance costs.
Mr Gurdal emphasised that enhancing efficiency and optimising processes were crucial for controlling costs and mitigating the impact of the revenue decline.
“We have made substantial strides in operational efficiency, achieving positive outcomes in clinker incorporation, alternative fuel utilisation, CO2 emission and maintenance costs, among other areas,” said Mr Gurdal.
“Efficiency and process optimization played a vital role in efforts to optimise the costs to offset the decline in revenue…”
Shares of the cement maker on the DSE fell to 3,900/- on Monday, down from 3,940/- the previous week. On an annual basis, the share price decreased by 5.34 per cent from 4,100/-at the end of July last year.