Cement firms up dividends

Dar es Salaam. Investors with Tanzania’s two listed cement manufacturing firms are rubbing their hands in glee as the companies’ boards of directors propose increased dividend payments from 2015 proceeds despite facing bitter competition from new markets entrants.

The board of directors for Tanzania Portland Cement Company Limited (trading as Twiga) has proposed a Sh306 per share which is 14.6 per cent increase from the Sh267 that was issued from the 2014 proceeds, according to the firm’s audited financial statement.

“The proposed dividend includes two interim amounts of Sh95/share and Sh111/share paid in October 2015 and February 2016 respectively…The last dividend of Sh100/share will be paid on/about June 30, 2016,” the company’s statement reads.

Twiga Cement has had a smooth ride throughout 2015, raising its sales by a cool 22 per cent compared to 2014 figures, thanks to increased capacity and production efficiency among other factors.

With increased sales, revenues grew by Sh44.6 billion to reach Sh288 billion in 2015, sending the net profit up by three per cent compared to 2014 figures. It reached Sh56.2 billion in 2015.

On the other hand, Tanga Cement (trading as Simba) has already declared an interim dividend of Sh3.5 billion. This is a slight improvement from a dividend of Sh3.49 billion that was issued from its 2014 proceeds. Besides, the company’s board is still considering a final dividend announcement from the firm’s 2015 proceeds which were not that impressive.

The Tanga-based cement manufacturer saw its net profit dropping to Sh8.2 billion - at group level – in 2015 from as high as Sh28.4 billion in 2014, largely due to increased competition which affected its sales volumes.

“The 9.9 per cent decline in sales revenue was a result of competition from new entrants into the market which put downward pressure on sales prices and volumes,” reads the firm’s financial statement, signed by its board chairman, Mr Lawrence Masha.