East African Portland Cement has reported a 42% drop in full year net profit amid increased operating costs.
Financial statements published on Friday show net profit dropped from Sh7.15 billion in 2015 to Sh4.14 billion in the year ended June 2016, largely driven by an increase in operational losses from Sh577.57 million to Sh1.58 billion.
East Africa’s largest cement maker had earlier in February issued a profit warning saying it expected profit to be lower by at least 25%.
This was blamed on high operational costs and forex exchange losses. The company had also warned of unrealised losses from its investment portfolio.
During the year, operation losses increased 174.3% from Sh577.57 million to Sh1.58 billion but currency exchange losses from foreign operations dropped to Sh8.58 million in 2015 from Sh15.34 million a year earlier.
Revenues increased from Sh8.41 billion to Sh8.87 billion, driven by higher cement sales.
However, earnings per share were lower at Sh46.06 from Sh79.52 and the board did not recommend the payment of dividends.
