[2008-08-08]  Bamburi Cement grows earnings by 21 %
Bamburi Cement Group, the leading cement company in East Africa, has today announced half-year financial results for the period ending June 30, 2008. Despite a stormy start of 2008 the Group’s operating profit went up to KShs. 2.9 Billion representing a 21% increase compared to the same period last year, buoyed by an increase in turnover from KShs.10.5 Billion to KShs.11.4 Billion (a 9% increase).



Announcing the half-year results after a Board of Directors meeting today, Bamburi Cement Group Chairman, Richard Kemoli said, “The first six month period to 30 June 2008 was very challenging following the post election situation and its impact on the economy. Inflation rates rose to levels unseen in the recent past putting further pressure on business activities across the region”

Mr Kemoli noted that the Group recorded good performance despite the challenging operating environment experienced across the region. Said Mr. Kemoli, “In Kenya, the good performance was stimulated by strong market recovery in the second quarter of the year and augmented by good production performance’’

The Board proposed an interim dividend of KShs 3.20 per ordinary share amounting to KShs.1.2 billion which is payable on or about 6 November 2008. Earnings per share went up 29% to KShs 5.30, while the Group’s Tax charge, due to both the Kenya and Uganda governments, increased by 36% to KShs. 0.9 billion, maintaining the company’s position as one of the largest tax payers in the region.

During the period under review, Bamburi Cement Group continued to successfully implement its capacity enhancement strategy, making significant capital investments.

Said the Group Managing Director, Mr Michel Puchercos, “During the six months to June 2008, Bamburi Cement Group launched a KShs. 0.4 billion clinker cooler project at the Mombasa Plant. In addition, the Group invested in a new Packing Plant and truck packing yard at Mombasa Plant and Nairobi Grinding Plant respectively. All these will go a long way towards boosting our production capacity and enhancing our ability to serve customers better. In Uganda, we commenced the construction of a new production line at the Kasese Plant at a cost of KShs. 7 Billion to double our capacity. This project is due for completion by 2010.’’

Mr. Puchercos reiterated the Group’s commitment to upholding good safety behaviour and practices for staff and contractors alike as a route to achieving the Group’s Vision 2010. He noted the critical role played by good safety results to the Group’s performance.

“During the period ended 30 June 2008, we achieved significant milestones in the Group’s journey towards safety excellence” Said Mr Michel Puchercos, “A number of best practice safety standards, key among them Personal Protective Equipment and Working at Height, were fully implemented across all sites in East Africa. Every staff and contractor continues to live by their commitment to our Safety Policy through responsible behaviour and active engagement of one another’’

The new Group Finance Director, Mr. Joshua Oigara said the Group’s operating profit remained strong despite a difficult operating environment, mainly due to post election challenges at the beginning of the year, rising power and fuel costs and upward pressures on transport rates.

‘’During the first half of the year, we continued to face significant cost pressures, particularly transportation, fuel and power costs. However, we benefited from better operational performance and continued focus on our cost optimization program, Excellence 2008 supported by other initiatives.’’ said Joshua Oigara. ‘’Over the past years, despite an increasingly adverse cost environment, the Group has constantly endeavoured to avert pressure on cement prices by passing to customers only a portion of the cost increases. During these periods, our average ex-works selling price increases were no more than half of overall cost increases’’ noted Mr Oigara.

Despite the expected slowdown of Kenya’s GDP, following the post election disturbances during the first quarter of 2008 and escalating international oil prices, rising inflation, and infrastructural constraints (in particular roads and high energy costs) the Group maintains a positive outlook with regard to its performance in the second half of the year. The Group will continue with its innovation, cost optimisation initiatives and customer focus agenda to address these challenges.

Speaking during the announcement, Chairman Kemoli emphasized that Bamburi has a strong commitment towards social responsibility in Kenya with a particular interest in education. Bamburi Cement provides education support to hundreds of young Kenyans through bursaries, a technical apprenticeship programme and an internship scheme that provides practical attachment skills to students in various academic disciplines.

The Chairman also noted the success of the Bamburi Cement Green Schools Project. This is an innovative environmental programme involving 106 schools in arid areas in Kenya where Bamburi Cement assists the students in the planting of trees in the school compounds and provision of clean drinking water by building water tanks. The project offers a sustainable source of wood fuel by ensuring that the schools have their own woodlots instead of harvesting trees.

Notes to editors
Bamburi Group is the leading cement producing and marketing Group in the Eastern Africa region. Its subsidiaries include Hima Cement Ltd (Uganda), Bamburi Special Products Ltd and Lafarge Ecosystems Ltd. Bamburi Cement is a subsidiary of Lafarge. Lafarge is the world leader in building materials, with top ranking positions in all of its businesses: Cement, Aggregates & Concrete and Gypsum.

The Lafarge Group is present in 76 countries and has 90,000 employees. Its sales for 2007 amounted to 17.6 billion Euros up from 16.9 billion Euros in 2006.

The customer is at the heart of the Lafarge business. It offers the construction industry and general public innovative solutions that bring greater safety, comfort and quality to their everyday surroundings. Lafarge offers all construction industry sectors (from architect to tradesman, from distributor to end user), a comprehensive range of products and solutions for each stage of the building process.


Source: (c) Bamburi Cement limited 2008