Kenya's ARM Cement posted a pretax loss of Sh645 million for the nine months to September, blaming losses related to the depreciation in regional currencies against the dollar, the company said yesterday.
The cement maker, which reported pretax profit of Sh1.62 billion in same period of 2014, said revenue for the first nine months of 2015 rose seven per cent to Sh11.7 billion, thanks to increased cement sales in Kenya and in Tanzania.
While the demand for cement grew more than 10 per cent during the period, "the sharp depreciation of both the Kenyan and Tanzanian currencies in the nine months has resulted in an unrealized exchange loss," the company said in a statement.
It said the loss amounted to Sh2 billion on the firm's dollar denominated borrowings.
"The fundamentals for continued economic and construction sector growth remain strong despite the recent currency depreciation and increase in interest rates," the company said.
Kenya's shilling has lost about 12 per cent against the dollar so far this year. Tanzania's shilling has lost nearly 20 per cent of its value.
Booming construction in East Africa have buoyed demand for cement in recent years but local firms are preparing for increased competition from new entrants like Nigeria's Dangote Cement, which is investing in Kenya.
The company said its board did not recommend paying an interim dividend. The company paid a first and final dividend of 0.60 shillings per share for 2014.
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