Fuel troubles stalk Kenyan tyre maker Sameer
business, kenya, money, news 8:23 AM
NAIROBI, (Reuters) - Rising energy costs, power cuts and weak regional currencies are set to eat into profits at Kenyan tyre maker Sameer Africa and the company will pay no interim dividend this year.
Sameer reported first half 2011 pretax profit up 12 percent on Wednesday, driven by cost cuts and a slight improvement in sales. Pretax profit rose to 80.243 million shillings ($887,889) and sales climbed to 1.79 billion shillings from 1.76 billion shillings.
The company said its basic and diluted earnings per share inched higher to 0.22 shillings a share from 0.21 shillings previously, and said it would not pay an interim dividend.
The company said it was faced with rising costs of fuel and raw materials, with natural rubber and synthetic rubber increasing by 61 percent and 44 percent respectively compared with the last quarter of 2010, the company said in a statement.
"Increase in costs of energy, power rationing and the continued weakening of regional currencies will continue to remain a challenge to business performance for the balance of the year," the company said.
Kenya Power , the country's sole power distributor, plans to start rolling blackouts for an indefinite period starting on Wednesday this week due to transmission breakdowns and a delay in installing generators after a drought slashed water levels at hydro dams.
Weaker currencies in Kenya, Uganda and Tanzania have also whittled down Sameer's potential market.
Sameer reported first half 2011 pretax profit up 12 percent on Wednesday, driven by cost cuts and a slight improvement in sales. Pretax profit rose to 80.243 million shillings ($887,889) and sales climbed to 1.79 billion shillings from 1.76 billion shillings.
The company said its basic and diluted earnings per share inched higher to 0.22 shillings a share from 0.21 shillings previously, and said it would not pay an interim dividend.
The company said it was faced with rising costs of fuel and raw materials, with natural rubber and synthetic rubber increasing by 61 percent and 44 percent respectively compared with the last quarter of 2010, the company said in a statement.
"Increase in costs of energy, power rationing and the continued weakening of regional currencies will continue to remain a challenge to business performance for the balance of the year," the company said.
Kenya Power , the country's sole power distributor, plans to start rolling blackouts for an indefinite period starting on Wednesday this week due to transmission breakdowns and a delay in installing generators after a drought slashed water levels at hydro dams.
Weaker currencies in Kenya, Uganda and Tanzania have also whittled down Sameer's potential market.
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