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KAMPALA - The manufacturer of baked clay building products, Uganda Clays Limited (UCL), has reported a net loss of sh2.8b for the year ended December 31, 2023, citing operational disruptions and lower production volumes as key contributors to the decline.

The loss, a 217% decrease from the prior period’s profit of sh2.4b, has led the company to forgo paying a dividend for the year.

“Given the company’s loss during the period, the company is unable to pay a dividend for the year,” the Board of directors headed by Eng. Martin Kasekende, noted in the company’s audited earnings report for the period.

UCL is listed on the Uganda Securities Exchange. Total revenue for the period dropped 17% to sh30b, down from sh36.6b in 2022. However, overhead costs were trimmed by 10% to sh12.2b from sh13.5b attributed to management's strict cost management and reduction initiatives.
“The company’s main plant in Kajjansi faced operational disruptions resulting in decreased production levels. Additionally, the company faced unfavorable macroeconomic conditions, amongst which was the depreciation of the shilling against the Euro, directly impacting the cost of equipment and spare parts purchased mainly from Europe.

These factors led to decreased revenues and a decline in overall company performance,” the company said.

Finance costs, on the other hand, increased by sh1.8b, primarily due to the unwinding of interest related to the modification of the National Social Security Fund (NSSF) loan.

“Efforts were made to increase product inventory by enhancing production efficiencies, notably through investments in critical spare parts.

As a result, production volumes of roofing tiles in the first quarter of 2024 have increased by 51% compared to the same period in the previous year,” the company reported.