Kenya's East African Portland Cement full-year earnings drop

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Updated Mon, 27 Oct 2014 09:51:24 GMT

Kenya's East African Portland Cement posted a net loss of 386 million shillings ($4.32 million) for the year ended June 30, saying it had been hurt by price competition, high staff costs and the weakening shilling.

A year ago, Kenya's No. 3 cement producer posted a net profit of 1.7 billion shillings

The company will not pay a dividend this year, it said in its results, posted late on Friday.

Earnings per share tumbled to -4.30 shillings, compared to 19.73 shillings a years ago.

The company said its administrative costs had gone up by 700 million shillings following a restructuring of its management, staff compensation and an increase in staff gratuity.

Construction has been one of Kenya's fastest growing sectors over the last decade, fuelled by a burgeoning middle class with higher disposable incomes, as well as government-fuelled infrastructure expansion across the country.

In its report, the company said it hopes to capitalize on that growth and plans to spend 2.5 billion shillings in the coming year on new investments.

"The company has not been left behind and is aggressively investing in new machinery and equipment to increase efficiency and capacity," it said.

But it also said that "the market will continue to be highly competitive, and is likely to see declining prices for the foreseeable future."