Uganda Clays Makes Profit amid a tough Covid-19 Year

“Despite the COVID-19 pandemic that has affected the economy and many businesses, UCL remained resilient, producing unprecedented results, having registered the highest profit after tax of UGX 4.9bn from a loss position the previous year,” Mr. Kasenkende said upon declaring the results.”

Uganda Clays Limited [UCL] Board Chairman Martin Kasekende(L) MD Reuben Tumwebaze(M) and ag Head of Finance (R) during the meeting on Thursday

By Nasser Kasozi Akandwanaho

Uganda Clays Limited through the Board of Directors revealed, on Thursday, July 1, that the company posted good results for the year 2020 with a net profit of UGX 4.9 bn which is a turnaround from a loss of UGX 88 Mn in 2019.

The significant improvement in the performance of the entity resulted in a dividend pay-out of UGX 1.2 bn (UGX 1.35 per share) out of the profits. This was announced by the UCL Chairman, Board of Directors, Martin Kasekende, during the entity’s Annual General Meeting at Sheraton Hotel, Kampala held virtually in compliance with the COVID-19 SOPs.

Uganda Clays Limited celebrated its 70 years in the country with a Shs 4.9 billion profit for the calendar year 2020, a turnaround from the loss it recorded the previous year.

It is not exactly clear what pushed up the profit of the company although a statement from the company points to investments in the nearly risk-free government securities and a slash in costs as partly responsible for a decent revenue stream.

For a company that has struggled with poor performances in recent years, coupled with a number of management shake-ups, this profit is bound to raise the hopes of many shareholders considering that it happened in a difficult year defined by the coronavirus pandemic.

Martin Kasekende, the chairperson of UCL, promised that the company is on the right path to sustain this growth.

“We believe this is not a one-off good performance and the company was well and truly on a trajectory of growth and profitability, and I would, therefore, like to congratulate management upon delivering a remarkable performance in 2020 in spite of the challenging business environment,” he said during the company’s virtual annual general meeting last week.

Reuben Tumwebaze, the UCL managing director of UCL, said: “The Covid-19 pandemic, whilst presenting challenges for the business and impacting the business, especially in the first half of the year, also acted as a catalyst for change, prompting us to take decisive action to protect and upgrade the business. This included a reassessment of our costs, ensuring we are fit for the future and in a strong position to capitalize on continued improvement in our markets.”

This included a reassessment of our costs, ensuring we are fit for the future and in a strong position to capitalize on continued improvement in our markets.”

According to a press statement, “an increase was also realised in the other income from Shs 845 million in 2019 to Shs 1.8 billion in 2020 related to interest from investments in government securities. The company further noted that the total overheads dropped to Shs 9.3 billion in 2020 from Shs 11.1 billion in 2019 “as a result of cost management measures put in place during the period.”

Uganda Clays, says there was strong demand for its tiles during 2020 even when the fortunes for the real estate industry got dented by the impact of the coronavirus pandemic. 

The performance, however, was not reflected in the company’s share price at the Uganda Securities Exchange (USE). The share price stayed put at Shs 8, where it has been for months. The USE is facing a shortage of liquidity, where a number of share prices have been unchanged for more than a year. 

Nevertheless, UCL announced that it was going to pay out a dividend of Shs 1.2 billion, which would translate into Shs 1.35 per share, out of the profits.

UCL says it will continue following its five-year strategic plan, which it adopted in 2019 to turn around the fortunes of the company, by financing its operations from company earnings. 

The company’s total Assets grew by 11%; closing the year 2020 at UGX 68.8bn from a value of UGX 62.2bn at the close of 2019.


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