NAIROBI, Kenya, Aug 23 – Bamburi Cement’s operating profits have reduced by Sh900 million on account of loss of sales in Rwanda, higher energy and logistics costs and capacity expansion in Kenya and Uganda.
The company posted Sh300 million in the six months to June 2019, compared to Sh1.2 billion reported in the first half of 2018.
The cement maker’s reduced profitability has also been impacted by the significant drop in cement uptake by the Standard Gauge Railway project compared to same time last year when Phase 2A was still underway.
Closure of the Rwanda-Uganda border since early this year rendered the Rwanda market inaccessible, which contributes about 20 percent of Bamburi’s revenues in Uganda.
Despite significant headwinds as a result of contracted cement market in Kenya and the inaccessibility of the Rwanda market, we have managed to hold the topline from declining, thanks to the benefits accruing from progressive successful implementation of our “Building for Growth” strategy”
Bamburi Cement CEO Seddiq Hassani says despite market challenges highlighted, the Group’s turnover at Sh18.7 billion was flat indicating a resilient underlying topline performance on a like for like basis.
Net comprehensive income after tax, was however rose to Sh0.4 billion, from Sh0.3 billion, owing to the tax benefit from the capacity expansion projects commissioned in the previous year.
Consequently, earnings per share grew to KES 1.61 from KES 1.47 in 2018.
Cash generated from operating activities at Sh1 billion was lower than same period prior year at Sh1.7 billion, mainly on account of lower operating profit.
Uganda closed the first half of 2019 in a net borrowing position, while Kenya remains cash positive.