Buildings material company Uganda Clays swung to a first-half loss in the first six months of the year as “frequent machinery breakdown[s]” dented production and resulted in lower sales.
The company on Friday posted a net loss of Shs686m, compared with a profit of Shs1.3bn in the same period last year. Revenue from sales was Shs13.3bn, down 26.3 per cent on the year, while the cost of sales dropped by 4.9 per cent. The basic loss per share was Shs0.76, from earnings of Shs1.41 per share a year ago.
“The first half of the year has been challenging due to unfavourable macroeconomic conditions, characterised by high inflation and the depreciation of the Ugandan shilling against the Euro, which impacts the company’s equipment purchases,” the company said in a statement.
In addition, Uganda Clays hinted at the possibility of continued production challenges through the remainder of the year if the pressures on input costs persist. For now, though, it said inflation has “been consistently dropping,” which could lead to lower production costs. “As the company continues to invest more in repairing machinery, we anticipate a steady increase in the company’s revenue during the second half of the year,” said the statement.
Operating profit reduced to Shs979m from Shs1.8bn in the same period last year, while operating expenses fell 21.3 per cent to Shs5.2bn.