Office of the Managing Director

On behalf of the Management, it is my privilege and honor to present to you the East African Portland Cement Plc annual report and financial statements for the financial year ended 30th June 2025. Though the year was marked by significant macroeconomic challenges, we demonstrated resilience and adaptability. Both our financial and non-financial performance metrics closed on a strong note, underscoring the robustness of our business model.

Operational Performance

The financial year ended 30th June 2025 marked a significant production milestone in our recent history, recording a year-on-year clinker and cement production growth of 121% and 96% respectively, buoyed by operational discipline across our production and engineering units, improved plant availability due to proactive maintenance and plant improvements, enhanced capacity utilization of our key plant installations, and optimal stakeholder management ensuring support across the value chain. This production achievement underscores our capacity to scale while maintaining consistency and quality, cornerstones of our brand.

Commercial & Market Performance

We take immense pride to see that our brand continues to be a trusted partner in building the future of our nation, from infrastructure megaprojects to individual homes. Our dispatch volumes grew by 101% year-on-year at the backdrop of improved and consistent production, coupled with successful route to market initiatives and effective pricing strategy. Our distribution networks remained agile and highly responsive to shifting market dynamics. By leveraging technology, real-time data, and strong partnerships across the value chain, we ensured product availability, timely deliveries, and customer satisfaction across the markets that we serve.

Financial Performance

The company revenue surged by 116% year-on-year to Kshs 7.084 billion, buoyed by improved and consistent cement production, successful route to market initiatives, effective pricing strategy and strong demand recovery in our key market segments. Our focus on increasing margins through cost optimization initiatives bore fruit in the period with the gross profits and profits after tax registering a record high year-on-year growth of 234% and 377% respectively. Initiatives to further improve the profit margins are under way including optimization of energy efficiency, exhausting utilization of the design capacity of our plant, reducing clinker factor through innovative and disruptive green products, investment in the circular economy among other initiatives.

Sustainability & ESG

Sustainability has become a key differentiator in the cement industry globally and East African Portland Cement Plc is committed to being a responsible global citizen, not only to address the compliance aspect, but to leverage opportunities in this space to grow the performance of our topline and bottom-line. To this end, we have engaged a consultant to work with our team in developing a sustainability and ESG strategy which will provide a roadmap for structured and impactful execution of sustainability and ESG related initiatives. Our key areas of focus include among others; climate and energy, circular economy, biodiversity, and sustainable procurement. We intend to roll-out our first structured sustainability report that is compliant with global sustainability reporting frameworks at the end of the current financial year.

Forward Looking

As we look ahead, the outlook for EAPC PLC remains positive, and reflects our strategic priorities. The East African regional cement demand is expected to grow at a compounded annual rate of 1.3% from $2.66 billion in 2024 to $2.98 billion in 2033. This growth will be driven by the accelerating infrastructure projects, surging housing demand due to urban migration, and a broadening industrial base. Roads, bridges, ports, airports and railways all demand vast quantities of cement, making it the cornerstone of the region’s growth. With our strong brand equity, and rich asset base, we are well positioned to capitalise on these opportunities through growth and expansion.

Our commitment to sustainable growth is reflected in our ongoing expansion of production capacity. As we optimize our clinker production and ramp up cement output, we aim to increase our market share to a significant double digit percentage by the end of the current financial year. This expansion is a testament to our broader vision of becoming a leading producer of high-quality cement and related products, distinguished not only by operational excellence but also by our commitment to sustainability and community impact.

In the near term, we aim to optimize our operations by leveraging innovative technologies, improving supply chain efficiencies, and expanding our use of supplementary cementitious materials, alternative fuels and renewable energy sources. This will help reduce production costs and support our sustainability targets.

Acknowledgments and Closing Remarks

No success is achieved in isolation. Any accomplishment we have made is the result of a collective effort. I would like to express my deepest gratitude to the Board of Directors for their invaluable guidance, to our dedicated employees whose hard work and commitment remain the foundation of our achievements, and to our shareholders, customers, host communities, governments, and other stakeholders for their unwavering trust and partnership.

As we look ahead, I am filled with excitement and confidence about what the future holds for East African Portland Cement PLC. Together, we will continue to deliver impactful results and drive sustainable growth across Kenya and the larger East African Region. Thank you for being an integral part of East African Portland Cement PLC’s journey. We look forward to the year ahead with optimism and determination, confident in our shared vision for success.

- CPA Mohamed O. Adan