Dar es Salaam — Tanzania's ALAF Limited has almost doubled its net profit in the first six months of this year, but costs of sales ate almost the entire revenue generated in the period.
The company, the largest manufacturer of roofing sheets and other building materials, posted a net profit of Tsh5.59b ($3.5m)- up to June this year compared to Tsh2.98b ($1.86m) of the same period last year.
However, most of the profits were consumed by cost of sales that cut down revenue from Tsh70.54b ($44.08m) to Tsh15.46bn ($9.66m). The cost also increases by over 12% from the previous half.
During the period under review, the firm that have roofed the nation for the last five decades, managed to cut down selling and administrative expenses by 30.6% to Tsh4.59bn ($2.87m).
The performance, according to the financial statement released last week, pushed up earning per share from Tsh11 ($0.0069) to Tsh20 ($0.013). In 2008 ALAF floated the first tranche of seven year bond of Tsh15.07bn ($9.4m) to finance its expansion.
In the past three years, the country experienced massive erratic power supply to elevate cost of production-most hit being manufacturers.
The Bank of Tanzania's Monthly Economic Review of July shows that export of manufactured goods has declined from $1.06b in the first half of last year to $922m of this year's first six month.
A study carried by the Confederation of Industries of Tanzania (CTI) last year shows that manufacturers are incurring huge revenue losses owing to unreliable electricity supply estimated to be Tsh31b ($19.38m) per annum.
The report conducted last July dubbed Challenges of Unreliable Electricity Supply to Manufacturers in Tanzania indicates also the country is losing its competitive edge due to upward price adjustments.
However, since January electrical supplies have increased to shed light for good performance in this year. ALAF is the only company in its category in Tanzania to be accredited with ISO 9001:2000 and ISO 14001:2005 based on international standards relating to environmental care.