PERFORMANCE
The company’s turnover decreased by 7% largely attributtable to prolonged plant shutdown undertaken in October to December 2014 to install a new dust management plant in compliance with NEMA regulations; and also to upgrade the rest of the plant in order to fix persitent equipment breakdowns. Coupled with this was the continued erosion of cement prices which reduced by about 5% during the year. Concequently, Gross profit reduced from 26% prior year to close at 22% in the current year mainly due to reliance on the more expensive purchased clinker during the prolonged plant shut down. Approximately Kshs 1.1 Billion was spent on purchased clinker during the prolonged plant shut down resulting to an operating loss of Kshs 577 Million. Selling and administrative expenses reduced by 6% in line with the tight cost management
adopted during the period saving approximately Kshs 200 Million. Finance costs went up by 16% due to the use of debt capital to finance the development projects for the new packing line and feeding lines for the cement mills. The profit before tax of Kshs 7.3 Billion was boosted by Kshs 174 Million foreign exchange gain, Kshs 836 Million realised gain on disposal of a parcel of land compulsorily acquired for the Standard
Gauge Railway (SGR) project and Kshs 7.2 Billion revaluation gain on investment property in accordance with the International Financial Reporting Standards. The investment property consisting of two parcels of land in Athi River was valued at shs. 9.4 Billion up from shs. 2.25 Billion the previous year. Increase in value is mainly attributable to the compensation rates for SGR positively impacting land values in the affected areas. Part of the land has been invaded and the company is pursuing legal channels to evict the invaders. This includes press notices warning the public that the land is not for sale. Relevant government agencies including EACC have been notified.