Uganda Clays Limited Faces Decreased Revenue with Challenging Macroeconomic Conditions and Machinery Breakdowns

Published On: September 8, 2023Company: Uganda Clays Limited (UCL.ug)
What key challenges did Uganda Clays Limited face in the first half of 2023?
Uganda Clays Limited faced difficult macroeconomic conditions characterized by high inflation and a depreciating Ugandan shilling against the Euro. Additionally, frequent machinery breakdowns led to system inefficiency and significantly contributed to decreased revenue for the company.

Summary

  • Overview: Uganda Clays Ltd faced challenging macroeconomic conditions in the first half of 2023, including high inflation and a depreciating Ugandan shilling. There were also frequent machinery breakdowns, which resulted in decreased revenue. The company, however, remains dedicated to its capacity expansion project and the protection of the environment and employee well-being.
  • Performance Highlights: Revenue decreased by 26%, and gross profit fell by 54%, mainly due to machinery breakdowns and lower production volumes. Overhead costs, however, decreased by 21% due to superior cost management initiatives. Despite this, the company made a loss before tax. Total assets saw a 1% increase due to continued capital investment.
  • Balance Sheet: Total assets increased slightly due to ongoing capital investment in capacity enhancement. However, cash and cash equivalents reduced by 27% because of decreasing sales revenue and capital investment commitments.
  • Current Trading and Outlook: Inflation has been dropping, which should help lower production costs. The company also plans on investing more in machinery repair, which is expected to boost revenue in the second half of the year.
  • Message from the Directors: The interim condensed financial statements comply with the Interim Financial Reporting (IAS 34) and reflect accounting policies consistent with prior annual financial statements. The company’s audited financial statements should be read in conjunction with these interim statements.

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About Uganda Clays Limited (UCL.ug)

Uganda Clays Limited manufactures and markets clay products for the building and construction industry in Uganda. Its product offering ranges from roofing tiles, bricks and floor tiles to decorative grilles, ventilators, pipes and suspended floor units and partition blocks. The company supplies the local building trade in Uganda and exports products to Kenya, Tanzania, Burundi, Rwanda, the DRC and South Sudan. Uganda Clays Limited was founded in 1950 and its head office is in Kampala, Uganda. Uganda Clays Limited is listed on the Uganda Securities Exchange

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