Uganda Clays fails to pay dividends after UGX2.8b net loss in 2023

Uganda Clays has announced that it will not pay any dividends this year after registering a net loss of UGX2.8 billion for the year 2023.

 During the release of the company’s financial results on Friday, the board attributed the loss of 2.8 billion shillings for the year 2023 to a fall in revenues and marginal cost adjustments.

Profit dropped from Ugx 14.8 billion to 8.7 billion shillings. The roofing tiles maker says earnings per share dropped from Ugx 2.7 shillings in 2022 to minus Ugx 3.6 in 2023.

“The earning per share decreased to UGX (3.17) from UGX2.71 which is due to a reduction in profit and the Dividend Per Share was 0 in 2023,” Mr. Jones Muhumuza- Head of Finance at Uganda Clays, said.

EBITDA, or earnings before interest, taxes, depreciation, and amortization, was UGX 3.6Bn, a decrease of 52% from the FY 2022. The company said the decrease was due to an increase in the costs of inputs majorly arising due to inflation. Net Profit decreased by 217 % to UGX (2.9)Bn, due to a decline in revenue.

Eng. Martin Kasekende, the Board Chairman, said the company invested UGX 7.9 billion in capacity expansion, leading to improved production performance in the second half of the year.

However, Mr. Reuben Tumwebaze, the MD, said Uganda Clays Ltd achieved success in kiln recovery (79%) and staff engagement (71%), surpassing targets.

“Equipment breakdowns and machine integrity issues led to increased delivery times and decreased customer satisfaction. Two new presses at the Kajjansi factory improved production in the second half of the year,” Tumwebaze explained.

Despite recent challenges, he said the company remains committed to profitability and has a significant order book and project pipeline, with good opportunities for growth due to domestic housing market demand.

UCL’s main shareholders includes National Insurance Corporation, Central Bank of Kenya Employee Pension Fund,  Bank of Uganda Staff Retirement Plan, and  of course National Social Security Fund among others.

In the period ended December 2022, Uganda Clays had recorded a 25 percent drop in profits to Shs2.4b.