Uganda Clays charts recovery path from Shs. 2.8 billion loss

Uganda Clays Ltd aims to recover from a revenue drop in 2023 and improve performance
The revenue decline was attributed to geopolitical tensions and internal inefficiencies affecting the supply chain
The company faced a net loss of 2.85 billion and will not be paying dividends for the fiscal year 2023

Uganda Clays Ltd is looking to shake off an underwhelming performance in the previous year (2023) which saw its revenues take a significant dip on account of a myriad of factors.

The company faced a challenging year, concluding its 5-year strategic plan with a revenue drop and operational setbacks, as highlighted in their latest annual general meeting held on June 21, 2023, at the Kampala Serena Hotel.

Following a drop in revenue from UGX 36.6 billion in 2022 to UGX 30.1 billion in 2023, Uganda Clays is now keen on charting a course towards profitability and sustainability.

The revenue decline was attributed to a mix of geopolitical tensions and internal inefficiencies, which impacted the supply chain and operational output.

Eng. Martin Kasekende, Board Chairman of Uganda Clays pulse uganda

"This year was particularly tough, but we are committed to steadying the ship amidst these turbulent times," said Eng. Martin Kasekende, Board Chairman of Uganda Clays.

Despite the setbacks, the company made substantial investments in capacity expansion, amounting to UGX 7.9 billion, which have started to yield improvements in production performance.

Read: Uganda Clays gears for expansion as NSSF restructures Shs. 20B loan

No dividends

Mathias Nalyanya, the Company Secretary, underscored the financial strain the company faced with a candid acknowledgement of the financial downturn. He informed the shareholders, the majority of whom attended virtually, that there would be no dividends to be paid it owing to the loss of position.

"The company registered a net loss of 2.85 billion during the year under review, a stark contrast to the net profit of 2.4 billion in the previous year," Nalyanya stated.

“As a result of this financial outcome, the board has decided against proposing a dividend for the fiscal year 2023.”

Eng. Kasekende also highlighted the board's efforts to navigate the company through these challenges, including seeking external financial support to enhance production capacity and product quality.

"Our significant order book and project pipeline reflect the competitive position of our business, and the pressing domestic housing needs in our market provide us with good opportunities for sustainable earnings growth in the medium to long term," he added.

Mr. Reuben Tumwebaze, the Managing Director of Uganda Clays pulse uganda

Mr. Reuben Tumwebaze, the Managing Director of Uganda Clays, detailed the operational challenges and strategic responses undertaken throughout the year.

"Equipment integrity and machine breakdowns severely impacted our operations, leading to increased turnaround times for product delivery," Tumwebaze explained. However, he also noted the introduction of new tile presses at the Kajjansi factory, which are expected to optimise production significantly by 2024.

In the face of operational hurdles, Uganda Clays has not lost sight of its corporate social responsibility. The company has actively engaged in health camps and community support activities, emphasising its commitment to the welfare of the surrounding communities.

"We ran some CSR campaigns including a health camp at our Kamonkoli plant, which provided free optical and dental checkups and treatment to 132 members of the community," Tumwebaze proudly shared.

As Uganda Clays moves forward, it remains dedicated to overcoming the current challenges through strategic investments and operational enhancements. The company is developing a new 5-year strategic plan focused on revitalizing its market approach and reinforcing its commitment to delivering sustainable building solutions.

Eng. Kasekende reaffirmed the company's resolve, stating, "With the housing market poised for growth, we are confident in the future. Our last strategy, themed ‘build the capabilities for success,’ set a solid foundation on which we are developing our next 5-year strategic plan."

The overarching goal is to ensure that Uganda Clays not only returns to profitability but also continues to deliver on its promise of "Beauty to last."