East African Cables 2014 profit down, to open upgraded plant
By Standard Reporter | February 12th 2015
Kenya: East African Cable said it would open an upgraded production plant in Nairobi to further its presence in the regional market.
The firm, which makes cables for the utility and telecoms industries, said it would open the modernised and expanded Kitui Road plant in the first half of this year after reporting a 13 per cent fall in pretax profit.
According to trading results released yesterday, pre-tax profit fell to Sh507.5 million during the year ended December 31, 2014 from Sh585.4 million registered the previous year. The firm explained that lower margins in some of its markets had offset revenue growth.
However, it said despite a decline in London metal exchange prices of 12 per cent, the group revenue grew by 13 per cent due to increased volumes driven by new markets.
The said commissioning of the plant would provide additional capacity and flexibility to offer a wider product range and to cover the wider eastern and central Africa region.
The firm announced mid last year it was stepping up efficiency at the Kitui Road factory by installing modern machines, driven by increased demand for its products in the region. Its main market is energy firms, real estate developers and telcos.
The firm is counting on increased demand for its products in the region where governments and utility firms are spending billions of shillings on power generation, transmission and distribution.
For instance, Kenya and Tanzania have invited bids for a consultant to oversee construction of a high-voltage power line connecting the two nations, part of efforts to meet growing demand for electricity and deepen integration of their economies.
The two countries will build approximately 510 km of 400 kilovolt (kV) power lines and several substations to allow them trade in power.
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