East African Cables H1 pretax slumps 93 pct

NAIROBI, (Reuters)

Kenya's East African Cables CABL.NR on Tuesday posted a 93 percent drop in pretax profit to 23.84 million shillings ($294,000) for the six months ended June thanks to the poor performance of its Tanzanian unit.

In July the maker of electrical cables and conductors issued a profit warning for the full year ending December.

"The significant decline in earnings for the group is attributable to poor results recorded by our Tanzania subsidiary," the firm said in a its interim statement to the Nairobi Stock Exchange. "This position, as disclosed in our announcement mid last month, arose from a one-off significant provision of bad debts, write-off and reorganisation costs incurred by the subsidiary."

East African Cable's turnover rose to 1.83 billion shillings from 1.69 billion shillings previously, while earnings per share dropped to 0.31 shillings from 1.04 shillings. East African Cables said the Tanzanian unit was now operating profitably, returning to profit for the first time in July.

"Despite the drop at the subsidiary, the board is confident that with our continued expansion into the region, coupled with focus on costs and efficiency, business will continue to be vibrant and profitable," it said.