Radar | Jul 17,2022
Jun 27 , 2024
Habesha Cement S.C. has marked a milestone in its history with a remarkable turnaround in its operation in 2023. The company recorded its first-ever profit before tax of 1.03 billion Br, an astonishing contrast to the 1.26 billion Br losses posted the previous.
Gross profit also improved drastically, reaching 2.25 billion Br last year, up from a gross loss of 85.47 million in 2022. The launch of a new product, OPC Cement N, contributed to its competitive positioning.
The company’s turnaround is attributed to an acquisition by Getu Gelete’s family, who helped the embattled company make a series of strategic decisions and operational enhancements that have reversed its fortunes. Revenue soared to 4.85 billion Br, a 357pc increase from the previous year, unprecedented growth in the industry demonstrating the family’s strategic initiatives to adapt to market demands.
The company’s external auditors, HST, noted material uncertainty related to the company's going concern status due to accumulated losses, but acknowledged the strategic steps taken to reduce debt and improve operational efficiency.
"Our audit opinion is not modified in respect of this matter," they stated, reflecting confidence in the company's prospects.
Despite facing disruptions such as security issues at its quarries near the town of Debre Brehan, 130Km north of Addis Abeba; frequent power cuts; and, shortages of spare parts due to a lack of foreign exchange, Habesha Cement delivered a commendable performance.
The company's total assets surged to 14.1 billion Br in 2023, surging over fivefold from the previous year, driven by increased investments in property, plant, and equipment, as well as better management of current assets. Total equity turned positive, standing at 3.25 billion Br, up from a negative 4.1 billion Br in 2022. In 2023, Habesha Cement settled 698 million Br in loans, including a loan from TDB Bank in foreign currency, and successfully converted a substantial portion of its Dollar-denominated loan into local currency.
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