* Q1 pretax 84.67 mln shillings vs 172.68 mln year before
* Turnover down 15 percent
* High copper, aluminium prices hurt operations
NAIROBI, April 29 (Reuters) - Kenya's East African Cables (CABL.NR: Quote, Profile, Research) on Thursday posted a 51 percent drop in pretax profit for the first quarter of 2010 after a surge in metal prices put “extreme pressure” on margins.
The company said in a statement first-quarter pretax profit fell to 84.67 million Kenya shillings ($1.1 million) from 172.68 million a year earlier.
The firm's turnover for the year fell by 15 percent to 775.1 million shillings, hurt by rising copper and aluminium prices on the London Metal Exchange (LME).
"Despite a growth of 8 percent in copper volumes, the average LME prices for copper and Aluminium increased by 111 percent and 59 percent respectively above quarter one 2009,” the company said in a statement.
"This has put extreme pressure on margin levels.”
East African Cables has operations in most countries in the region. It said performance at its Tanzanian unit was below par due to low demand for its products from utility companies there.
"The subsidiary is being restructured to reduce dependency on utility business which accounted for over 70 percent of its business in past years,” it said.
"Despite the challenges the group is poised for growth with the completion of the factory upgrade programme by June this year.”
East African Cables shares closed trade on Thursday at 23.0 shillings, down from 24.0 shillings a day before. (Reporting by George Obulutsa, Editing by David Clarke and David Holmes) ($1=77.45 Kenyan Shilling)
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