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ARM HY16
Pesa Nane
#1 Posted : Friday, August 26, 2016 11:40:35 AM
Rank: Elder


Joined: 5/25/2012
Posts: 4,105
Location: 08c
Pesa Nane plans to be shilingi when he grows up.
Pesa Nane
#2 Posted : Friday, August 26, 2016 11:48:07 AM
Rank: Elder


Joined: 5/25/2012
Posts: 4,105
Location: 08c
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div
Pesa Nane plans to be shilingi when he grows up.
Felipe
#3 Posted : Friday, August 26, 2016 12:11:00 PM
Rank: New-farer


Joined: 11/2/2014
Posts: 38
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.
TA = Price Action + Vol + S/R + Trend + Pattern.
the deal
#4 Posted : Friday, August 26, 2016 6:36:24 PM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Double digit drop in revenues...someone is eating their lunch...lets see if they can compete in a crowded area that is the East Africa Cement market...
murchr
#5 Posted : Friday, August 26, 2016 7:20:08 PM
Rank: Elder


Joined: 2/26/2012
Posts: 15,979
the deal wrote:
Double digit drop in revenues...someone is eating their lunch...lets see if they can compete in a crowded area that is the East Africa Cement market...


Welcome back, your absence was felt
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
VituVingiSana
#6 Posted : Friday, August 26, 2016 10:39:05 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,038
Location: Nairobi
Is the construction industry/sector slowing down OR have the unlisted competitors increasing their sales (market share) compared to ARM and Bamburi? [No idea what's happening at EAPCC].
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#7 Posted : Friday, August 26, 2016 11:10:09 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,038
Location: Nairobi
Felipe wrote:
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.

Why have imports (eg Pakistan) stopped?
What stops China [which is funding these projects] from supplying cement to replace the Pakistani suppliers?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Felipe
#8 Posted : Friday, August 26, 2016 11:53:24 PM
Rank: New-farer


Joined: 11/2/2014
Posts: 38
VituVingiSana wrote:
Felipe wrote:
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.

Why have imports (eg Pakistan) stopped?
What stops China [which is funding these projects] from supplying cement to replace the Pakistani suppliers?


Imports have stopped especially from the 2nd half of last year after local cement makers slashed prices up to Tsh 10,000 per 50kg due to intense competition:

* It would not make economic sense to traders in such areas as Kariakor, Mwenge, Bunju within Dar city to stock imported cement as it would not sell because prices of locally made cement have been reduced.
* local masons and building contractors use local cement because their prices were now more affordable and were good in quality.

Note: It's the aspect of quality and prices which have automatically reduced or taken out cheap imports from Asian countries from the local market.
TA = Price Action + Vol + S/R + Trend + Pattern.
VituVingiSana
#9 Posted : Saturday, August 27, 2016 12:01:17 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,038
Location: Nairobi
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.

Why have imports (eg Pakistan) stopped?
What stops China [which is funding these projects] from supplying cement to replace the Pakistani suppliers?


Imports have stopped especially from the 2nd half of last year after local cement makers slashed prices up to Tsh 10,000 per 50kg due to intense competition:

* It would not make economic sense to traders in such areas as Kariakor, Mwenge, Bunju within Dar city to stock imported cement as it would not sell because prices of locally made cement have been reduced.
* local masons and building contractors use local cement because their prices were now more affordable and were good in quality.

Note: It's the aspect of quality and prices which have automatically reduced or taken out cheap imports from Asian countries from the local market.

Wouldn't the (much) lower prices for local cement substantially reduce the profitability of the cement firms?
Are any of these firms selling cement at a loss?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
alotoftalk
#10 Posted : Saturday, August 27, 2016 5:24:50 AM
Rank: Member


Joined: 8/27/2015
Posts: 138
Location: Harare
Now that they have solved their capital structure issues (financing costs, forex) with the CDC investment.

Hopefully now they'll get time to look at the operational challenges. Almost ~ KES 1 Billion hit on the top line with no new competitor in the market. To be fair to them looks like it's an industry issue as Bamburi has also taken a hit.
Investment philosophy development in progress...
Felipe
#11 Posted : Monday, August 29, 2016 4:20:08 PM
Rank: New-farer


Joined: 11/2/2014
Posts: 38
VituVingiSana wrote:
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.

Why have imports (eg Pakistan) stopped?
What stops China [which is funding these projects] from supplying cement to replace the Pakistani suppliers?


Imports have stopped especially from the 2nd half of last year after local cement makers slashed prices up to Tsh 10,000 per 50kg due to intense competition:

* It would not make economic sense to traders in such areas as Kariakor, Mwenge, Bunju within Dar city to stock imported cement as it would not sell because prices of locally made cement have been reduced.
* local masons and building contractors use local cement because their prices were now more affordable and were good in quality.

Note: It's the aspect of quality and prices which have automatically reduced or taken out cheap imports from Asian countries from the local market.

Wouldn't the (much) lower prices for local cement substantially reduce the profitability of the cement firms?
Are any of these firms selling cement at a loss?

At present, Tsh 10,500 - Tsh 12,000 is the selling price range for most cement companies in Tanzania. This price is fair, taking into account the initial price was Tsh 13,000 per bag. Production of cement at different grades, quality of own clinker and reduction of overall variable costs will allow Athi to remain competitive in this challenging market.
TA = Price Action + Vol + S/R + Trend + Pattern.
mibbz
#12 Posted : Monday, August 29, 2016 4:38:39 PM
Rank: Member


Joined: 2/18/2011
Posts: 448
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.

Why have imports (eg Pakistan) stopped?
What stops China [which is funding these projects] from supplying cement to replace the Pakistani suppliers?


Imports have stopped especially from the 2nd half of last year after local cement makers slashed prices up to Tsh 10,000 per 50kg due to intense competition:

* It would not make economic sense to traders in such areas as Kariakor, Mwenge, Bunju within Dar city to stock imported cement as it would not sell because prices of locally made cement have been reduced.
* local masons and building contractors use local cement because their prices were now more affordable and were good in quality.

Note: It's the aspect of quality and prices which have automatically reduced or taken out cheap imports from Asian countries from the local market.

Wouldn't the (much) lower prices for local cement substantially reduce the profitability of the cement firms?
Are any of these firms selling cement at a loss?

At present, Tsh 10,500 - Tsh 12,000 is the selling price range for most cement companies in Tanzania. This price is fair, taking into account the initial price was Tsh 13,000 per bag. Production of cement at different grades, quality of own clinker and reduction of overall variable costs will allow Athi to remain competitive in this challenging market.


Dangote cement has started production and supply in Tanzania with good prices. Expect fierce competition to kick out 'weaker players!

Future is still shaky; 13% drop might just be the start

http://allafrica.com/stories/201606270173.html
Felipe
#13 Posted : Monday, August 29, 2016 5:23:03 PM
Rank: New-farer


Joined: 11/2/2014
Posts: 38
mibbz wrote:
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.

Why have imports (eg Pakistan) stopped?
What stops China [which is funding these projects] from supplying cement to replace the Pakistani suppliers?


Imports have stopped especially from the 2nd half of last year after local cement makers slashed prices up to Tsh 10,000 per 50kg due to intense competition:

* It would not make economic sense to traders in such areas as Kariakor, Mwenge, Bunju within Dar city to stock imported cement as it would not sell because prices of locally made cement have been reduced.
* local masons and building contractors use local cement because their prices were now more affordable and were good in quality.

Note: It's the aspect of quality and prices which have automatically reduced or taken out cheap imports from Asian countries from the local market.

Wouldn't the (much) lower prices for local cement substantially reduce the profitability of the cement firms?
Are any of these firms selling cement at a loss?

At present, Tsh 10,500 - Tsh 12,000 is the selling price range for most cement companies in Tanzania. This price is fair, taking into account the initial price was Tsh 13,000 per bag. Production of cement at different grades, quality of own clinker and reduction of overall variable costs will allow Athi to remain competitive in this challenging market.


Dangote cement has started production and supply in Tanzania with good prices. Expect fierce competition to kick out 'weaker players!

Future is still shaky; 13% drop might just be the start

http://allafrica.com/stories/201606270173.html


Indeed, TPCC, TCC, Athi and seven other cement makers cannot undercut Dangote given its international approach to the cement business. But they can capture more market shares through add on services.. As for now, top three brands are Twiga, Dangote and Rhino/Tembo.
TA = Price Action + Vol + S/R + Trend + Pattern.
MadDoc
#14 Posted : Monday, August 29, 2016 10:24:56 PM
Rank: Member


Joined: 10/26/2015
Posts: 151
Felipe wrote:
mibbz wrote:
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
VituVingiSana wrote:
Felipe wrote:
Pesa Nane wrote:
Quote:
Take Aways

Revenue 13% down
Increased competition in Tz with new market entrant
Tz prices 33% down due to competition
EBITDA 17% down to KES 1.6Bn
Higher energy costs
Finance costs KES 1.5Bn up

Net Loss KES 267 Million
CDC made an equity investment of USD 140 million
New capital to pay down debt and support group's expansion plans Anxious

No interim div


I'm optimistic about the future prospects of the cement industry in EA and in particular Tanzania

Tanzania key infrastructure projects this financial year:
* Shift of government seat to the designated capital of Dodoma: major infrastructure projects expected
* $6.7bn standard gauge railway that will link Rwanda and Burundi
* $10bn mega port at Bagamoyo
* $4.0bn oil pipeline which is expected to transport Ugandan crude oil to the Tanga for export
* Rehabilitation of the Central railway line and improvements in Dar es Salaam and Mtwara ports

Competition has led to reduced prices but also imported cement from such countries as Pakistan are no more. Cement from local producers are dominating the market. Most hardware stores stock cement from Tanzania Portland Cement company, *Rhino Cement and Dangote Cement.

* produced by Athi River Mining.

Why have imports (eg Pakistan) stopped?
What stops China [which is funding these projects] from supplying cement to replace the Pakistani suppliers?


Imports have stopped especially from the 2nd half of last year after local cement makers slashed prices up to Tsh 10,000 per 50kg due to intense competition:

* It would not make economic sense to traders in such areas as Kariakor, Mwenge, Bunju within Dar city to stock imported cement as it would not sell because prices of locally made cement have been reduced.
* local masons and building contractors use local cement because their prices were now more affordable and were good in quality.

Note: It's the aspect of quality and prices which have automatically reduced or taken out cheap imports from Asian countries from the local market.

Wouldn't the (much) lower prices for local cement substantially reduce the profitability of the cement firms?
Are any of these firms selling cement at a loss?

At present, Tsh 10,500 - Tsh 12,000 is the selling price range for most cement companies in Tanzania. This price is fair, taking into account the initial price was Tsh 13,000 per bag. Production of cement at different grades, quality of own clinker and reduction of overall variable costs will allow Athi to remain competitive in this challenging market.


Dangote cement has started production and supply in Tanzania with good prices. Expect fierce competition to kick out 'weaker players!

Future is still shaky; 13% drop might just be the start

http://allafrica.com/stories/201606270173.html


Indeed, TPCC, TCC, Athi and seven other cement makers cannot undercut Dangote given its international approach to the cement business. But they can capture more market shares through add on services.. As for now, top three brands are Twiga, Dangote and Rhino/Tembo.

http://www.businessdaily...em-1-13n8ksmz/index.html
Aguytrying
#15 Posted : Tuesday, August 30, 2016 7:32:47 AM
Rank: Elder


Joined: 7/11/2010
Posts: 5,040
ARM and BAMBURI need to take classes from eabl asap how to deal with foreign competition. 20% undercut is not joke on bottom line profitability
The investor's chief problem - and even his worst enemy - is likely to be himself
maka
#16 Posted : Tuesday, August 30, 2016 10:17:50 AM
Rank: Elder


Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Aguytrying wrote:
ARM and BAMBURI need to take classes from eabl asap how to deal with foreign competition. 20% undercut is not joke on bottom line profitability


They are going to be hit properly...
possunt quia posse videntur
Angelica _ann
#17 Posted : Tuesday, August 30, 2016 10:41:17 AM
Rank: Elder


Joined: 12/7/2012
Posts: 11,901
maka wrote:
Aguytrying wrote:
ARM and BAMBURI need to take classes from eabl asap how to deal with foreign competition. 20% undercut is not joke on bottom line profitability


They are going to be hit properly...

Walevi galore chased away those RSA guys smile
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
majimaji
#18 Posted : Tuesday, August 30, 2016 10:51:56 AM
Rank: Veteran


Joined: 4/4/2007
Posts: 1,162
Angelica _ann wrote:
maka wrote:
Aguytrying wrote:
ARM and BAMBURI need to take classes from eabl asap how to deal with foreign competition. 20% undercut is not joke on bottom line profitability


They are going to be hit properly...

Walevi galore chased away those RSA guys smile


(One of) The result of chasing those RSA guys is that now we drink substances that make us clinically blind. The EABL products are not affordable to the ordinary man.
watesh
#19 Posted : Tuesday, August 30, 2016 11:01:04 AM
Rank: Veteran


Joined: 8/10/2014
Posts: 950
Location: Kenya
What is making Dangote Cement 40% CHEAPER? Is it high quality cement?
VituVingiSana
#20 Posted : Tuesday, August 30, 2016 1:05:58 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,038
Location: Nairobi
majimaji wrote:
Angelica _ann wrote:
maka wrote:
Aguytrying wrote:
ARM and BAMBURI need to take classes from eabl asap how to deal with foreign competition. 20% undercut is not joke on bottom line profitability


They are going to be hit properly...

Walevi galore chased away those RSA guys smile


(One of) The result of chasing those RSA guys is that now we drink substances that make us clinically blind. The EABL products are not affordable to the ordinary man.

Taxes.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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