30th October 2003

THE DIRECTORS OF THE EAST AFRICAN PORTLAND CEMENT COMPANY LIMITED ANNOUNCED THE AUDITED RESULTS FOR THE FINANCIAL YEAR ENDED JUNE 30, 2003.

		2003	2002
		Shs’000	Shs’000
Turnover		3,842,138	3,207,060
Gross Profit		1,010,801	974,757
Administrative Expenses & sale costs		(840,258)	(538,213)
Operating Profit		170,543	436,544
Net Interest Cost		(86,901)	(78,118)
Exchange Gain/(Loss)		298,522	(145,492)
Profit before Taxation		382,164	212,934
Taxation		(156,021)	(89,755)
Net Profit for the Year		226,143	123,179
	Earnings per share	shs. 2.51	shs. 1.37

Despite the adverse economic conditions, the results reflect an improvement in turnover by 20% over the previous year. Unlike the previous year, growth in cement demand locally grew in the second half of the year which witnessed resurgence in the building and construction sector. The sales were also boosted by the growth in export mostly to Uganda. Increase in cement prices during the year contributed to the increased revenue.

Gross profit margins declined despite the 4% increase in gross profit over of the previous year. The declined gross margins was attributed to the 27% increase in cost of sales related to fuel oil and plant repairs. Due to the tension in Middle East and the Iraq war, oil prices went up substantially in the first half of the year. Distribution costs also went up as a result of the upward revision of transport rates for both the raw materials and cement. The quality of power and downtimes continued to affect the efficiency of the plant and this contributed to higher unit cost of production compared to the previous year.

The administrative expenses increased compared to the same period last year. This was mainly attributed to the increase in unionisable staff costs arising from the Collective Bargaining Agreement entered into late 2002. The benefits agreed on were backdated resulting in payment in arrears covering two years.

As a result of the combined increase in the cost of sales and administrative expenses as indicated above, operating profit before tax and interest charges declined by 61%. However, the Shilling strengthened against the Japanese Yen resulting to an unrealized exchange gain of Kshs 298,522,000 against an exchange loss of Kshs 145,492,000 of the previous year. This exchange gain contributed to the improved net profit for the year by 84% compared to the previous year.

The Board of Directors has recommended a First and Final dividend of 35% (Kshs 1.75) per ordinary share of Kshs 5.00 amounting to Kshs 157.5 million subject to withholding tax where applicable. Subject to the shareholders’ approval, the register of members will be closed at 4:30 p.m. on Thursday, 11 December 2003 until Sunday, 21 December 2003. Subject to the shareholders’ approval, payment of dividends will be made on or about Monday, 22 December 2003 to the members on the register at close of business on Thursday, 11 December 2003.

ANNUAL GENERAL MEETING
The 71st Annual General meeting of the Company will be held on Tuesday, 9 December 2003, at 12.00 noon at the Factory, Athi River.

By order of the Board