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DAR ES SALAAM: Tanga Cement Company reported a 2.1bn/- loss in the second quarter of 2023, a slight improvement from 2.4bn/- loss before tax made in a similar period last year.

The Dar es Salaam Stock Exchange (DSE) listed cement maker which trades under the Simba Cement Brand, posted a marginal decline of five per cent in sales revenue, reaching 55bn/- down from 58.3bn/- recorded during the second quarter of 2022, according to its financial statement for the second quarter of 2023.

Despite a decline in sales revenue, the company’s gross profit showed an increase of 25 per cent to 14.1bn/- up from 11.2bn/- attained in the equivalent period last year.

The increase in gross profit has been credited to the implementation of cost containment strategies.

However, the financial statement shows interest expense increased by 61.35 per cent from 3.9bn/- in the second quarter of 2022 to 6.3bn/- in the second quarter of 2023.

The cement maker which is a subsidiary of AfriSam (Mauritius) Investment Holdings Limited with production facilities in Pongwe area in Tanga recorded a significant increase in cash generated from trading activities and net cash flows from operations, attributed to improvements in gross margin and EBITDA.

Cash generated from trading activities surged by 438 per cent from 1.7bn/- in June 2022 to 9.0bn/- in June 2023. Net cash flows from operations increased by 558 per cent from 1.4bn/- recorded in June 2022 to 9.0bn/- in June 2023.

This increase was attributed to an improvement in the gross margin and EBITDA of 6 per cent and 63 per cent respectively as a result of management’s adept execution of cost management and cash‑ flow enhancement strategies.

Tanga Cement is optimistic about future prospects for growth due to anticipated increase in cement demand from major infrastructural development projects across the country which include the East African Crude Oil Pipeline Project (EACOP), the standard gauge railway and Dar es Salaam and Tanga Port upgrade.

The Group is optimistic about the positive impact of infrastructure development under government’s Development Vision 2025 and lauds the government’s initiatives to counteract oil price increases and scarcity of major foreign currencies.

The Chairman of the Board of Directors, Patrick Rutabanzibwa said in the statement that the growth outlook is tied to the growth in cement demand in Tanzania’s construction industry and opportunities available in the regional market where Tanzania is a significant player East African construction market.

“The Group is confident with the initiatives that the government has taken to combat the effects of increase in oil prices as well as the impact of the scarcity of major foreign currencies and commits to working together with the government in growing the economy,” said Mr Rutabanzibwa in the statement.

Tanga Cement Company is set to be acquired by Scancem International DA (Scancem), a subsidiary of Heidelberg Cement AG, which owns Twiga Cement, another major cement maker in Tanzania.

Scancem International DA signed an agreement to acquire a 68.33 per cent stake in Tanga Cement Public Limited Company from AfriSam (South Africa) (Pty) Ltd.

However the planned acquisition is subject to continuing legal twists after a tribunal judge nullified Fair Competition Committee (FCC) decision to sanction the merger at a second attempt in February this year.

The FCC approved the Scancem International DA’s acquisition of AfriSam’s Tanga Cement following a second application after the Fair Competition Tribunal (FCT) had blocked the initial application following an appeal by the now deregistered Chalinze Cement and Consumer Advocate Society.

DAR ES SALAAM: THE Tanzania Mercantile Exchange (TMX) has facilitated sale of more than 100,000 tonnes of commodities worth over 200bn/- in five years.

TMX is the government institution under the Ministry of Finance established to help farmers, traders, exporters and other various market actors access domestic and global markets and as well obtain a fair price in selling or buying of commodities.

According to the TMX Chief Executive Officer (CEO), Mr Godfrey Malekano from 2019 to 2023, the mercantile has been able to facilitate sale of a total of 135,103.721 tonnes of various commodities worth 287.98bn/-.

Speaking on Thursday in Dar es Salaam during the working session between journalists, editors and TMX coordinated by the Treasury Registrar (TR) office, Mr Malekano mentioned coffee as among the top commodities that were traded.

“Among the commodities that have greatly traded and contributed to TMX sales of more than 100,00 tonnes (worth 287bn/-) in a period of five years included coffee, cocoa, green grammes, sesame seeds, chickpeas and raw cashew nut,” he pointed out.

On top of the achievements, Mr Malekano said there is the need to continue addressing the challenges of quality and quantity of produces to meet the international standards.

Besides that, he underlined the need of adhering to the quality and standards of the produces by investing in the construction of silos, adding that by doing so, the country will increase exportation and address existing challenges of foreign currency.

“If we can well improve our systems and bring the desired results in terms of quality, it will be very easy to do international trade as we now know implementing the African Continental Free Trade Area (ACFTA),” he added.

Elaborating, the CEO noted that mercantile exchanges are relied upon by AfCFTA to be a link between countries in doing business, adding that the institution continues to look at investment areas and places, which require sufficient capacity building to support AfCFTA move.

In a related development, Mr Malekano also highlighted some of the reasons for the establishment of the TMX as including the ruling party CCM election manifesto (2015-2020 and 2020-2025), Agricultural Sector Development Programme Phase II (ASDP II) and the Kilimo Kwanza (Agriculture First) programme.

Mr Malekano said currently the TMX conducts only one type of mercantile ‘the spot exchanges’ which involves direct trading between farmers, traders, exporters and other market actors.

He added that in the future, the institution will jump into another type of mercantile exchanges which is a future option.

Moreover, he said the TMX’s vision is to become the leading and most diverse and dynamic commodity market place in East, Central and Southern Africa.

“TMX intends to provide a modern, efficient, transparent and reliable market platform for commodities to serve the national development goals through state-of-the-art technology and integrity,” he added.

Mr Malekano also commended President Samia Suluhu Hassan for developing the commercial and economic reforms adding that for the institute like TMX to operate it needs strong legal and commercial basics

ARUSHA: The Central Bank of Tanzania (BoT) warned Monday those who are holding foreign currency in secrecy, especially the US dollar, saying they are at risk of incurring huge losses.

Addressing a Working Session of Board Chairpersons and Chief Executives of Public Institutions, BoT Governor Mr. Emmanuel Tutuba, said Tanzania is implementing strategies to strengthen the availability of dollars, insisting that those stashing the global currency might be getting losses instead of profits.

“I urge you to return the money into the local market through proper channels. We will take legal action against all those who will be held using black market to complete their transactions,” the Governor said in Arusha.

Currently, Tutuba has said that the Government is getting US dollars through the usual procedure involving loans, aid, exports and that there is an increase in tourists who have also been contributing to the availability of dollars.

According to the Governor, the shortage of dollars is a global problem. It is a result of a decision by the US to halt the supply into the market as part of a monetary policy to control inflation.

The United States has planned such measures will remain active until next year. It hopes the measures would add the value of the dollar and reduce the inflation of the prices of goods and services in the US.

ARUSHA: PRESIDENT Samia Suluhu Hassan has presented a special award to the NMB Bank in recognition of the financial institution’s outstanding performance and contribution into the government coffers.

The award was presented to the NMB Bank’s Chief Executive Officer Ruth Zaipuna in Arusha, during the working meeting of Board Chairpersons and Executives of the Public Enterprises and Government Agencies.

The NMB Bank paid dividends amounting to 45.5bn/- to the government as the financial institution’s contributions from realised profits in the previous fiscal year.

“I encourage the Office of the Treasury Registrar to ensure that all public institutions and government agencies record good performance enabling them to record profits and reduce dependency on state support,” she said.

The government owns 31.8 shares in the NMB Bank, which is the second biggest financial institution in the country.

Other banks that government owns shares are CRDB, Tanzania Commercial Bank (TCB), National Bank of Commerce (NBC) and Azania Bank.

NMB is one of the financial sector privatisation success stories initiated and executed during the third phase government under late President Benjamin Mkapa.

According to the Head of State, the government has invested over 73tri/- in the public enterprises and other state-run institutions and it was their expectation that the funds should yield massive returns in profits.

On his part, the Treasury Registrar, Nehemia Mchechu pointed out that there are ongoing reforms in the public institutions and that so far there are 28 such organisations that have weaned themselves off from government subsidies and have now started making profits.

“Just as we have come up with this ‘list of fame,’ for top performing institutions, we were also contemplating to compile another list of shame for non-performers in future but with the ongoing reforms we are confident that it won’t come to that,” he said.

More than 600 participants from nearly 250 public enterprises in the country are attending the strategic workshop in Arusha targeting to improve performances of parastatal entities in Tanzania.

Other awarded entities include Twiga Minerals Corporation, State Mining Company (STAMICO), National Insurance Company (NIC), Tanzania Ports Authority and Tanzania Communications Regulatory Authority (TCRA).

In crowning the event, the Prime Minister Kassim Majaliwa presented a special award to President Samia Suluhu in recognition of the Head of State contributions in the ongoing reforms for the public sectors

TANZANIA Breweries Limited (TBL) has reported 42 per cent growth in net profit in the second quarter of this year boosted by significant increases in beer and spirit sales.

The oldest and largest brewing company in the country which is a local subsidiary of the world’s largest brewing company AB InBev, made 39.5bn/- profit after tax in the quarter ending in June up from 27.7bn/- obtained from a similar period last year.

According to financial statement for the second quarter of this year, the maker of Safari Lager, earned 301bn/- in revenue up from 260bn/- made in similar period last year, equivalent to 16 per cent increase.

The revenue increase has been attributed to growth across the beer and spirit categories driven by strong performance.

Shareholders of the Dar es Salaam Stock Exchange (DSE) listed brewing firm will be making more money with 43 per cent increase in basic earnings per share to 123/- in the second quarter of this year up from 86/- of the similar period last year.

Operating profit increased by 48 per cent driven by strong volume performance and an improvement in brand sales mix.

Selling and distribution costs were 27.8bn/- slightly lower than the second quarter of the previous year which reached 28.9bn/- due to what Managing Director, Jose Moran said “optimisation and efficiency in operations.”

Finance costs increased to 5.6bn/- from around 2.0bn/- in the second quarter last year due to the increase in foreign currencies exchange rate.

TBL has a controlling interest in Tanzania Distilleries Limited, Darbrew Limited and Kibo Breweries Limited.

It operates breweries in Dar es Salaam, Arusha, Mwanza and Mbeya, a distillery in Dar es Salaam and eight depots across the country.

THE long-term Treasury bond yields have yo-yoed in the last three years though show a steep increase in the first seven months of this year.

The yields are expected to rise further as the government’s demand for public financing has significantly increased after the 2023/24 budget rose by 6.9 per cent to 44.4tri/-.

Tanzania Securities Limited (TSL)’s latest report ‘Treasury Bond Yield Trend Analysis’ released recently shows this year’s yields of all bonds have significantly increased compared to the previous years’ lead by 15, 20, and 25-year.

The report showed in the first seven months of the year the 15- year bond yield climbed to 11.96 per cent from 11.20 per cent, the 20-year bond yield rose from 12.23 per cent to 18.03 per cent while 25-year yield significantly increased from 12.76 per cent to 13.60 per cent.

“The rise is mainly due to the increase in the government’s demands for funds to finance the budget which pushed down the prices of bonds, along with an increase in investor’s appetite for the bonds,” the report said.

The bond price and yield trends, despite registering a positive outlook since the beginning of this year, they have fluctuated in 2021 while in 2022 were down.

It is shown in the report that in 2021, the primary market recorded higher bond yields throughout the year compared to 2020.

The 20-year bond closed the year at a yield of 15.41 per cent an increase from 15.39 per cent by January in 2021.

The report also showed the 15-year bond yield climbed slightly by 0.0004 points from 13.53 per cent to the highest 13.57 per cent; by June 2021, the bond yield further climbed by 13.61 per cent.

Additionally, the 25-year bond was auctioned on April 2021, with a yield of 16.34 per cent. The auction was oversubscribed by 279 per cent which demonstrated the appetite for longer-term securities. The auction registered a minimum price of 95/-, thus pushing yields to 16.34 per cent. Though at the end of the year its yields dropped to 15.49 per cent.

Moreover, in 2022 the bond market experienced a major drop in yields. The drop in yield was mainly due to the decline of coupon rates—interest rates.

The report showed by May 2022, 25-year bond yields declined to 12.36 per cent from 15.49 per cent at the beginning of the year, attributed to the decline of coupon rates from 15.95 per cent to 12.56 per cent.

The 20-year bond yield declined to 11.60 per cent due to a decline in interest rates that impacted the coupon rate from 15.49 per cent to 12.1 per cent. The bond’s yield climbed to reach 12.23 per cent at the end of the year.

On other hand, last June 2022 the 15-year bond yield declined to 11.27 per cent from 13.57 per cent in the previous year.

The decline was due to a drop in the interest rate, coupon rates, of the bond from 13.5 to 11.15 per cent.

The TSL report shows that at the late June 25-year bond auction, the successful bids, allotted, sum up to 276.78bn/- against 180bn/- that was offered. This pushed the minimum successful bid down to 90 and made yields climb to 13.56per cent.

Dar es Salaam. Although the global economy is exposed to tightened financial conditions, climate-related risks, ongoing war in Ukraine, and the cumulative effects of the Covid-19 pandemic, risks to the Tanzania’s economy remained moderate, a new report has shown.