TANZANIA Portland Cement Company, Twiga Cement, has reported a 25 per cent profit increase and reached a new sales record, despite Covid-19 pandemic.
Twiga, listed on Dar es Salaam Stock Exchange (DSE) main market, posted a profit of 74bn/- last year compared to 59bn/- in 2019.
Thus, proposed a dividend rise of 34 per cent to 390/- per share to be paid this month. The firm’s Chairman, Mr Hakan Gurdal, said in a statement that it recorded an operating profit of 104.9bn/- mainly due to higher volumes, stable pricing and efficient cost control.
“It is a very competitive market,” Mr Gurdal said “but with the anticipated catch up of growth in cement demand, we believe that [Twiga] can continue to benefit from the company’s strategic investments. “[Twiga, last year,] reached a new sales record, the cement market continued to grow around 7.0 per cent, which was beyond GDP (4.5 per cent) but below previous year.”
Turnover and sales volume increased by 6 per cent, and this increased revenue, combined with disciplined cost management led to an unprecedented operating profit increase of 20 per cent when compared to the previous year.
Twiga said despite Covid-19 managed to sell 7.0 per cent more of cement than in 2019. Also, the clinker output increased by 2.0 per cent compared to the previous year, “remaining the second-best ever year” in terms of clinker production. “Last year, we achieved new records in production, dispatching and cement sales, following a volumes strategy to offset the general price downward trend of the last ten years,” Mr Gurdal said.
The sales volume was pushed by on-going large infrastructure projects including new roads, SGR, Dar es Salaam port in continuous expansion, flyovers, hydropower projects and bridges.
“Twiga brand is deeply involved in all these projects and the trend remains strong and in the last six years, total sales have increased by 57percent, and the exports in the same period have increased seven times,” the chairman said.
The estimated cement market demand in Tanzania reached 5.9 million tons, including exports. The cement industry in Tanzania includes six integrated plants and several grinding facilities with production capacity reaching around 11 million tonnes by the end of this year.
The overcapacity is around 5.0 million tonnes. The firm share closed at 3,200/- share on Wednesday.