Company executives explain cause of Shs88million loss Kampala, Uganda | JULIUS BUSINGE | Uganda Clays Limited, a clay building materials manufacturer has recorded Shs88million loss for the year 2019 as opposed to the net profit of Shs1.9bn in 2018.
According to the company’s financial statements released on July 17, total revenue for the period was Shs30.7 billion and was largely the same as the prior year 2018 which was Shs30.0 billion.
Officials said there was a reduction in the gross margin of 4% compared to the prior year (2019: 31%, 2018: 35%).
Martin Kasekende, the chairman board of directors and Joseph Tukuratiire, a director said, the reduction in the growth margin was a result of machine down time at the Kamonkoli plant during the annual maintenance shutdown, in addition to a reduction in the firing capacity occasioned by scarcity of coffee husks which are the main fuel source.
Meanwhile, there was a 29% increase in the total overheads. This is majorly attributed to professional and consultancy costs incurred in the period and increased distribution costs.
However, there was notable improvement realised in the ICT environment to improve business processes and controls. Additionally, a provision was made in the financial statements in compliance with accounting standards of IFRS 9, officials said.
No dividends
In the statement, officials said, the board of directors does not recommend a dividend payment for the year ended December 2019. Further explanations to shareholders will be given at the Annual General Meeting for the year 2019 which shall be held on Sept.25 at 2:30 pm.
This performance comes at a time as the company continues to grapple with management challenges.
In March, the board sacked the managing director George Inholo and other top managers over failure to deliver and turnaround the company.
“We have stalled in growth and there is a lot of competition as we speak. We must up our game and get a team that can challenge what is going on and improve on shareholder value,” Kasekende told a local daily newspaper earlier in March. Inholo had served as MD for a period of six years.At the beginning of the year, company officials had shared a growth strategy rotating around implementing innovations for putting new tiles on the market.The company was also looking for alternative sources of energy to deal with the unpredictable prices of coffee husks.The good thing, officials said, the company has enough clay reserves for production of various constriction […]