Uganda Clays Ltd on Friday, June 30th, declared a Shs 0.5 per share dividend payout to shareholders for the year ending 31st December 2022.
The total dividend payable will be Shs 450 million, according to the company board chairman Eng. Martin Kasekende.
Kasekende explained to the shareholders at this year's Annual General Meeting held at the Kampala Sheraton Hotel, that the drop in the dividend pay from Shs 1.5 in the previous year, was as a result of the economic headwinds which cut into the company profits.
The leading building products manufacturer saw its earnings before interest, tax, depreciation and amortization; and net profit reduced by 33% and 59% respectively to 7.6billion and 2.44billion.
In the year ending December 2021, Uganda Clays had made a net profit of Shs 5.9 billion.
The Shs 450 million dividend is about 18.4% of the company's net profit.
"In arriving at this recommendation, the board took into consideration the dividend policy of the company and the need to retain substantial cash for capital expenditure to improve production capacity at both factory plants and to improve product quality as indeed," explained the board chair.
Kasekende blamed the profit decline on among others, a rise in costs especially on imports due to the weakening of the Uganda Shilling.
"The growth was also curtailed by breakdown in machinery, but we are in the process of remedying this," he added.
But with a steady recovery from Covid19 and the easing of the impact of the Ukraine-Russia war, as well as the ever growing housing demand in Uganda, Kasekende projected a faster company growth.
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Jones Muhumuza, the head of finance at Uganda Clays, informed the shareholders during the meeting about the company's ambitious expansion plans.
Muhumuza revealed that construction is already underway for a large tiles plant in Kajjansi, which will greatly increase output, efficiency, and the range of available products.
"We are buying an Italian tile factory. The benefits we anticipate from having this plant include enhanced productivity, improved product quality, and improved and optimized efficiency," he said.
The new tile production process will be entirely automated. With the designers, engineers, and suppliers of spare parts, agreements have already been made. Installation of the component parts for this line has already begun.
Meanwhile, the AGM reelected Joseph Tukuratiirwe who was due for retirement, back to the Board of Directors.
Two other members, Richard Byarugaba and Mrs Florence Mawejje who represent NSSF (the company majority shareholder) on the board, were also due for retirement.
However, their names were not forward to the AGM for reelection by the Fund. The Fund also didn't recommend any other names for the board slots.
As such, Kasekende said the two slots reserved for NSSF will remain vacant until nominees are sent in from the fund.
The Uganda AGM was held virtually for the fourth time in a row, at the Sheraton Hotel.
