The Kenya Shilling has been depreciating in value. As indicated in our last economic article, this was bound to affect industries in the construction sector. ARM Cement Ltd is a cement company operating in Kenya and Tanzania – where both currencies have shed value significantly in the forex market. This has seen ARM Cement record an unrealized forex loss of Kshs 1.4 billion.
When ARM Cement Ltd released its first half (H1) report, it announced a loss of Kshs 473.52 million (profit before tax). The management of the listed cement company attributed the losses to the Kenyan Shillings depreciation (the Kenyan Shilling has depreciated by 11% this year and the Tanzanian Shilling has shed 18% of its value) and an increase in interest rates that saw the company’s financing costs rise.
ARM Cement Ltd also has operations in Tanzania where it is setting up a clinker plant.