The Independent Uganda: You get the Truth we Pay the Price
The company continues to focus on maintaining business continuity, enhancing production capacity and product quality
Kampala, Uganda | THE INDEPENDENT | Uganda Clays shareholders will earn Shs 450 million or Shs 0.5 per share as dividends due to a 59% drop in profit after tax for the year ended December 31, 2022, to Shs 2.4bn.
This is a whopping 67% drop in dividend compared to 1.35 billion or Shs 1.5 per share earned in the previous year.
The clay products manufacturer recorded a 14% drop in gross profit to Shs14.8bn as revenues declined by 0.2% to Shs 36.6bn due to an increase in production costs triggered by high inflation during the same period under review.
“Because of the dampened global economic environment, the company operated in challenging business conditions in 2022 that was characterized by high inflation and increased interest rates,” the company’s board chairman, Martin Kasekende and CEO Reuben Tumwebaze said in a joint statement.
“These factors increased the costs of production and dampened consumer demand and ultimately affected the profitability of the company. Despite these challenges, the company posted positive results.”
Bank of Uganda statistics indicates that the value of the local currency weakened from about Shs 3,500 in January 2022 to about Shs 3,750 in December last year per US Dollar as inflation rose from merely 2.7% to as high as 10% -the highest ever in 10 years driven by an increase in food and fuel prices.
Focus on business continuity
However, the duo said the company has continued to focus on maintaining business continuity, enhancing production capacity and product quality by improving production efficiencies while ensuring the health and safety of staff and customers.
Uganda Clays overhead costs increased by 12% to Shs 13.5 bn 12 billion due to costs associated with the production capacity enhancement project and an increase in the deprecation expense arising from asset additions.
Last year, Uganda Clays executives announced plans to invest Shs 17.8 billion to acquire more land with clays and boost production amidst the escalating competition in the baked clays products market.
Kasekende, the chairperson Board of Directors at Uganda Clays Ltd said during the Annual General Meeting held virtually in June last year that the company also intends to develop high-performance culture and systems with a key focus on creating a customer-focused business.
In 2021, UCL invested Shs 10.5billion in the procurement of a tunnel kiln, a tunnel drier and related works at the Kajjansi factory, repair and extension of the Kamonkoli kiln and purchase of 140 acres of clay reserves near the Kajjansi area.
This helped the clay products producer which initially operated at 90% on natural drying capacity at the Kajjansi factory, to increase its production capacity from 300,000 tiles to 600,000 tiles per month. The Kamonkoli plant located in eastern Uganda, too, recorded an increase in tiles production from 270,000 to 360,000 per month.
Currently, Uganda Clays assets stand at Shs 76.9bn following a 3% increase last year due to deliberate capital investment in the two factories that included the Kamonkoli kiln extension and installation of new tile presses at both our factories.
