Kenya's Portland Cement swings to H1 profit, eyes expansion
* Cement maker says likely to reinstate dividends
* Construction one of Africa's fastest growing sectors
NAIROBI Feb 25 (Reuters) - Kenya's East African Portland Cement plans to expand after returning to profit during the six months ended December, boosted by cost cutting and improved cement sales.
Portland, Kenya's No. 3 cement producer, said on Monday it was optimistic of strong full-year results and was exploring expanding to Tanzania.
The firm, which also operates in Uganda and South Sudan, was also looking to grow its clinker production line after returning to profit for the first time in two years.
"We are now discussing the financing of these projects," managing director Kephar Tande told investors in Nairobi.
Portland plans to raise new capital through the Nairobi bourse, with the aim of increasing clinker production to 1.5 million tonnes by 2016 from 450,000 tonnes.
Tande also expects Portland to double its export market to 10 percent by 2014, while noting "good prospects" of the company paying a dividend to shareholders for the first time since 2010.
Construction has been one of east Africa's fastest growing sectors over the last decade, fuelled by a burgeoning middle class with higher disposable incomes. Returns on investment in the sector have outpaced those of equities and government securities.
Portland made a pretax profit of 376.27 million shillings ($4.3 million) for the six months ended December, compared with a pretax loss of 247.20 million shillings during the same period last year.
Tande said the business boosted profits by saving about 850 million shillings by reducing inefficiencies at its plants, which led to greater production of clinker, a key raw material for making cement.
($1 = 87.6000 Kenyan shillings) (Reporting by Beatrice Gachenge, Editing by Drazen Jorgic and Mark Potter)
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