Uganda Clays Limited managed to stay resilient in 2020 financial year despite the negative impact of Covid-19, posting Shs 4.9 billion in profits.
This is a massive turnaround from the loss of Shs 88 million realized in 2019.
This was revealed by Martin Kasekende, UCL’s Chairman Board of Directors during the company’s Annual General Meeting held on Wednesday.
“Despite the COVID-19 pandemic that has affected the economy and many businesses, UCL remained resilient, producing unprecedented results, having registered the highest profit after tax of 4.9 billion from a loss position the previous year,” said Kasenkende.
As a result of good financial results for the year ending December 2020, the company’s shareholders approved a dividend pay-out of UGX 1.2 Billion (UGX 1.35 per share), which represents 25% of the net profit for the year.
“We believe this is not a one-off good performance and the company was well and truly on a trajectory of growth and profitability, and I would therefore like to congratulate Management upon delivering a remarkable performance in 2020 in spite of the challenging business environment” kasekende added.
Meanwhile, the company’s total assets grew by 11% to Shs 68.8 billion in 2020 compared to Shs 62.2 billion in 2019.
However, total revenue dropped by 3 percent from Shs 30.7 billion in 2019 to Shs29.7 billion in 2020, majorly attributed to the negative impact of COVID-19 pandemic on the business environment.
UCL’s Managing Director, Reuben Tumwebaze said, despite the difficulties brought about by Covid-19 in 2020, it was also a period of continued strategic progress for UCL.
“The covid 19 pandemic whilst presenting challenges for the business and impacting on trading especially in the first half of the year also acted as a catalyst for change, promoting us to take decisive action to protect and upgrade the business” Tumwebaze said.
He said, the company took strategies including re-engineering of their cost base, ensuring they are fit for the future and in a strong position to capitalize on continued improvement in their markets, “Tumwebaze said.
UCL has for the past few years had mixed financial performances forestance in 2017, the company’s profit did not change from that of 2016, stagnating at Shs 2.4 billion.
2018, wasn’t a bad year for the company in terms of turnover as it registered a 10.7% growth in turnover to Shs 30.1 billion from Shs 27.2 billion in 2017.
Unfortunately, In 2019, UCL announced a loss of Shs 88 million in 2019, bringing an end to the company’s brief comeback on profit making after the profit dropped to Shs 1.9 billion from Shs 2.3 billion a year before.
This was largely attributed to the machine breakdown at the Kamonkoli plant in Budaka district, in Eastern Uganda, during the annual maintenance shutdown.
With its current comeback on profit-making, the manufacturing company can only hope for better in the years to come.