East Africa Portland Cement Company (EAPCC) has declared dividend payout of KES 1.0 per share translating to a total dividend payout of KES 90.0 million, marking the first time the company has announced dividends since 2011. This development comes after the company posted a profit of KES 1.0 billion in the financial year ended in June 2024.
The company incurred a loss of KES 1.3 billion in the financial year ended in June, 2023. In August, 2024 Richard Mbithi, the chairman of the company’s board of directors stated that the dividend payout was necessary to restore the faith in shareholders while hoping to maintain the payout in future through company profits. Following the losses in the financial year ended June 2023, EAPCC came up with a plan to maximize profits by selling some of its assets like the extensive land in Athi River. The revenue from the sale was expected to finance the dividend payouts as well as upgrade the factory.
On 15th March, 2024 the Managing Director (MD), Oliver Kirubai initiated a 25-day shutdown branded as turnaround maintenance shutdown. The aim of the shutdown was to enhance production capacity by replacing machinery and to obtain operational efficiency. The development was facilitated by the land sale. The KES 400.0 million upgrade led to a reported increase in monthly cement production to 50,000 tonnes as of August 2024 from the previous monthly average of 20,000 tonnes. Generally, the turnaround maintenance program was key in ensuring operational efficiency while maximizing output. The program, as well as the sale of land and brand repositioning, were pivotal in EAPCC reaching a breakeven point and attaining profits.
The future plan for maximizing production capacity and profits is by reinvesting the revenue from the assets sales in expansion.
The payments are proposed to start in February, 2025. The shareholders are encouraged to register for the payout by the end of business on 31st December, 2024. The government with a 52.3% stake and Lafarge with a 41.7% stake, combined with a stake of over 90% will be the biggest beneficiaries of the dividend payout, with the two shareholders receiving KES 47.1 million and KES 37.5 million respectively. The other stakeholders are expected to receive KES 5.4 million from the dividend payout.
