The Penden Cement Authority Limited’s (PCAL) annual profits have been on the decline since 2015. Records maintained with the Royal Monitory Authority (RMA) show, sales dipped from Nu 2.6bn in 2015 to Nu 1.6bn, last year.
Increasing overhead expenses and a decrease in production has led to a decline in profits. The company’s sales record maintained by the RMA shows a rapid decline in the past four years.
In just a year’s span between 2015 and 2016, sales slumped by Nu 868 M. The PCAL hasn’t recovered since then and profits have been severely affected. Between 2017 and 2018, the company’s profit dipped to almost Nu 40 M. Sales record for the first quarter of 2019 doesn’t show any promising signs.
The production decreased over the years but other expenditures have been on the rise. Between year-end 2017 and 2018, raw material consumption increased by Nu 20 M, purchase of clinker, one of the main ingredient in cement production, rose by Nu 40 M, coal consumption increased by close to Nu 5 M and employee cost and depreciation of machinery costs Nu 23 M combined.
However, increased expenditure hasn’t translated to increased profits. The PCAL management is attributing some of the decreased production to its aged plants and machinery.
Rumours are that the company’s limestone mining site is fast running out of stock. However, the company said the current mine will last for at least seven more years. A new site has also been identified in consultation with the Department of Geology and Mines, which will be operational within three years.
The PCAL is a DHI linked company with 40.3% in shareholding. As of December, last year, the PCAL’s net worth is over Nu 1.5bn.
