Uganda Clays Limited, the baked clay building materials company, has warned it will report a loss for the six months ending in June due to equipment breakdowns and challenging economic conditions.
The company said it had been affected “by a shortage of products that was occasioned by machinery breakdowns.” This was made worse by “unfavourable macroeconomic conditions, characterized by high inflation and the depreciation of the Ugandan shilling against the Euro,” it said in a statement.
Shares were unchanged at Shs14 on Friday afternoon following the trading update.
Uganda Clays equipment woes are not new, and were blamed for its decline in performance last year. Revenue reduced to Shs36.6bn, down from Shs36.7bn in 2021, because of “stock outs of major products in the month of January, October, and November caused by breakdowns of the production lines.”
However, in the statement releasing its full-year financials for last year, the company said it had “embarked on a capital expansion project” during which it would install a new plant.
Overall, Uganda Clays posted annual profit of Shs2.4bn in 2022, down from Shs5.9bn the previous year. Operating profit fell 61 per cent to Shs2.9bn, compared to 2021’s 26 per cent increase; this was largely due to a fall in interest and rental income – reported as “other operating income”.
