Uganda Clays Managing Director, Reuben Tumwebaze
Uganda Clays Ltd, the oldest manufacturer of clay building materials, has seen its 2022 half year profit after tax drop by 54% to Shs1.3 billion compared to Shs2.7 billion in June 2021.
According to the Company’s Unaudited Financial Statements for the Six Months Ended 30th June 2022, Uganda Clays’ overhead costs increased by 23% to Shs6.6billion from Shs5.4 billion in June 2021 driven by increased funding of the business initiatives for the period and increased operating costs resulting from increased inflation.
The results show that revenue from sales was Shs18 billion, 3% higher than Shs17.5 billion in June 2021 due to improved production efficiencies and expansion of the domestic market.
Balance sheet analysis shows that total assets increased by 9% to Shs77 billion from Shs71 billion in June 2021, attributed to continued investment in the capital investments (CAPEX) project. Cash from operations decreased by 21% to Shs5.6 billion from Shs7.1 billion in June 2021.
This was due to an increase in the production input costs. Investment in plant and machinery increased to Shs10Bn from Shs7Bn in June 2021, mainly relating to the acquisition of the new preparation plant.
Current trading and outlook
According to the financial statements signed off by Eng. Martin Kasekende, the Uganda Clays Chairman and Reuben Tumwebaze, the Company Managing Director, Uganda Clays projects the economy to improve in the second half of the year resulting in a steady growth in revenue.
“In addition, the Capex project for enhancement of production capacity is progressing well,” the company says.
The company further says that the trading conditions in the first half of the year have been difficult due to an unfavorable macroeconomic environment characterized by rising inflation and depreciation of the Ugandan shilling against other major international currencies and disruptions in the supply chain due to the geo-political conflict in Europe.
“This is highly characterized by the elevated fuel prices that increased the prices of all commodities and the supply chain challenges hence reducing marginal propensity to consume,” the Company says.
It adds: “Amidst the strong head winds, the company continues to manage inflation and supply chain pressures and is making good progress with its strategic plan, with investment in new production capacity progressing well, regional market penetration into Tanzania and Kenya. The company continues to enforce appropriate measures to safeguard the environment, monitor the health, safety, and wellbeing of its employees.”