CHAIRMAN'S STATEMENT 2017.
Dear Shareholders,
2017 was one of the most challenging years marked by suppressed
demand for Company products coupled with sharp demand for
regulatory compliance. Nevertheless I am pleased to report that our
Company delivered a good set of financial results for 2017taking into
account the low demand and stiff competition from within the country
as well as outside the country.
We remain focused in delivering our strategy investing for reliability,
responsiveness and disciplined approach to cost management. These
capabilities continue to anchor the Company as a regional player
positioned well to capitalize on regional opportunities from SADC
markets of Zambia, Malawi, Mozambique and Zimbabwe, EAC as well as
local Tanzanian market.
Revenue decreased by 7% to Tshs 15.0Billion in financial year 2017
from Tshs 16.1Billion achieved in 2016. Profit before tax declined by
30% from Tshs 3.1 Billion in 2016 to Tshs 2.2Billion whereas Profit
after tax declined by 21% from Tshs 2.7Billion to Tshs 2.2Billion. These
results clearly show that our strategy is resilient and capable of
delivering returns to shareholders even in difficult circumstances.
After very careful consideration, weighing up all the priorities, threats
as well as opportunities facing our Company, The Board of Directors
does not recommend dividend payment. In the last two years statutory
compliance has risen high on the list of legal, political and economic
risks that Companies operating in the region must address to ensure
continued existence. Our Company has paid legacy tax claims of over
Tsh 2.6 Billion from June 2017 to June 2018. Further audit by the
relevant authorities are ongoing and it is expected that further statutory
11 payments may be required. The Board therefore recommends that
priority should be given to settling any statutory dues that may emerge
from the ongoing audit by the authorities and this way clear the path for
the Company to pay dividends further on.
Looking forward, our Company was poised to establish a branch in
Zimbabwe having obtained the necessary permits. However a slump in
demand from the existing markets coupled with some regulatory
uncertainties has led the Board of Directors into halting temporally the
entry into Zimbabwe. This project is therefore no longer a priority until
such other time when fresh reassessment will be made.
Vote of thanks
I would like to take this opportunity to thank our staff members for
their hardwork and loyalty to our Company. Similarly, I would like to
thank the Board of Directors, Management, our valued customers and
all stakeholders for their support and valued contribution during the
year. We look forward to an improved performance in financial year
2018.
Thank you all and God bless you
Eng. Harold Temu
BOARD CHAIRMAN
