Despite market headwinds, particularly the competitive environment in the cement sector, Tanga Cement Public Limited Company continued to perform well during the second quarter this year with group sales revenue increasing by 50 per cent, to 58.2bn/- from 38.7bn’- achieved in March 2022.
The company attributed its solid performance to an increase in both cement and clinker demand due to increase in government projects and opening up of East Africa regional market.
Gross pr t also increased by 9 per cent to 11.2bn/- from 10.3bn/- achieved in March 2022, driven by the increase in revenue for the period.
The gross margin, however, decreased by 8 per cent from 27 per cent to 19 per cent in March and June 2022 respectively.
“The decline was caused by increase in fuel prices and logistics which lead to an increase in raw material prices, frequent power cuts which resulted in an increase in fuel consumption and maintenance costs of the equipment which breaks down when there are power dips. Unreliable electricity also resulted into a decrease in production,” the company said in its unaudited results circular
The company reported that EBITDA improved by 16 per cent to 5.7bn/- from 4.9bn/-achieved in March 2022 driven by improved operational efficiencies.
The Group however recorded a loss before tax of 2.4bn/- in the second quarter comparing to the loss before tax of 0.78bn/- recorded in the first quarter
According to the TCC Board Chairman Lawrence Masha, the group continues to be committed to its sales, logistics and cost optimisation initiatives as it continually seeks to enhance value for its stakeholders.
“The Group remains positive about the remainder of 2022 despite the very competitive landscape and unstable,” he said.
The company did not declare interim dividends to shareholders in 2022 to remain prudent with available cash resources in order to economy with the company’s Board has deciding to continue committing available current cash generated to the operational commitments.