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Tanga Cement (DSE:TCCL) is expecting to walk back into profitability lane thanks to strong sales after years of loss.


The firm, trades as Simba cement, yesterday issued a cautionary note to inform shareholders they expect “a significant improvement to a profit before tax” for last year compared to loss generated in previous year.


However, equity market analysts have it that the announcement is unlikely to push up share price since is still riding on the acquisition announcement between Scancem and Afrisam


Simba cautionary note issued on Thursday said the earnings per share to be between 247 and 276 per cent equivalent to between 60/- and 70/- per share compared to a previous loss of 34/-.


“The improved performance is a result of the Tanga Cement’s initiative to optimize the sales, logistics and distribution as well as its continued cost optimization initiative.



“The company has been able to achieve this despite the challenging global economic and operating environment conditions,” Simba cement said.


Alpha Capital Head of Research and Financial Analytics, Imani Muhingo, said the achievement was “very good news” to Tanga Cement shareholders since the company has had net losses since 2017.


“We are waiting for the results to see what the primary driver for this development was,” Mr Muhingo told Daily News.


He, however, said “we don’t expect this announcement to affect price movement much because the price is still riding on the acquisition announcement between Scancem and Afrisam.”


Tanga was pushing for a Standstill Agreement with its lenders to allow a restructuring of its debt facilities, according to their announcement in last August.


“…Therefore a possible drop in finance cost may be one driver to profitability, although the company indicated strong sales growth,” Mr Muhingo said.


Simba cement share Tanga Cement started off the year at 1,100/- closing at 1,820/- for the Wednesday trading.


According to the issued audited results for the six months ended last June, Tanga registered a net loss of 7.8bn/- up from the 5.2bn/- loss that was recorded in the same period in 2020.


The loss was attributed to a major repairs and maintenance on the clinker production units which resulted in an increase in total costs.


Daily News TZ

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