TANGA Cement has posted a net profit growth of 6 per cent, despite key challenges and critical issues that faced the cement industry last year.
The company outperformed its own profitability targets and recorded a net profit of 32.2bn/- last year compared to 30.4bn- recorded in 2009.
The year was rocked with the removal of suspended import duties and the impact on the increased importation of imported cement, deteriorating power supply and poor infrastructure.
Investment experts say that the positive performance of the listed company on the Dar es Salaam Stock Exchange (DSE) is a good indicator that its shares are also doing well.
Tanzania Securities Chief Executive Officer, Mr Moremi Marwa said that the company faced a number of challenges in the cement industry which could have slowed down its profitability.
He was commenting on the company's weekly market commentary saying the key indicators among others were high margins, underlying sales growth, strong cash flow, above average earnings, yields and dividend payouts.
According to the financial results posted recently, Simba Cement's revenue grew by 24 per cent 149.2bn/- compared to 119.9bn/- recorded in the pervious year. Earnings per share (EPS) rose to 506/- per share from 478/- per share in the previous year.
As a result, the company increased its dividend payout for the year by 38 per cent 247/- per share from 179/- per share in 2009.
"The dividend payout represents a yield of 13 per cent given the current market price of 1,920/-", Mr Marwa said in the weekly market commentary, issued yesterday, adding: "In line with our earlier analysis and forecast, Simba Cement is currently trading at a PER (price earning ratio) of 3.79".
Tanzania Securities earlier forecasts that listed stocks at DSE are under priced compared to other regional players. Meanwhile, the DSE all-share index made a U-turn yesterday to appreciate by 1.16 per cent to close the session at 1,174.72 points.
Last Friday, the DSEI dropped to historic day low of 15.42 per cent and plunged to 1,172.67 points. The index was pulled down after the Nation Media Group (NMG) price dropped by over 13 per cent to 3,100/- from 3,600/- a share
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