Central East African Railways (Cear) has posted a 52 percent decline in profit to $2.1 million (about K1.6 billion) in the first quarter of this year, a situation company officials say is due to an unmet target for cargo.
Speaking to journalists in Blantyre on Friday, Cear finance manager Christina Chithila said the profit declined from $4.4 million (about K3.3 billion) achieved in the first quarter of 2018.
She said the company’s net debt increased by $41 290 (about K30 million) to $363 256 (about K268 million) during the review period from $321 966 (K238 million) in the corresponding period as a result of third party loans acquired during the years as well as accumulated loan interests.
On his part, Cear director Gustav Henrique Stein expressed optimism on the company’s outlook which he said will be based on reduced theft and rehabilitated rail lines.
The company’s commercial manager Kondwani Mkonda said Cear had planned to, among others, import fertiliser, which was shifted to the later part of the year and instead, transported clinker, tobacco and pigeon peas.
“We had planned on other goods at a certain price, but we failed to ferry the goods and we found others with lower tariffs; hence, reduced profit,” he said.
Mkonda said the company is banking on the rehabilitated line from Nkaya to Limbe, Blantyre and the Nkaya-Kanengo-Mchinji rail line as well as the Nacala to Moatize line for increased volumes of cargo.
Cear, jointly with its Mozambican sister company, Corridor Desenvolvimento Do Norte (CDN), runs a concession on the Nacala Railway Corridor. The concession, which began in 1999, runs up to 2045. n