[2008-07-25]  Athi River Mining Profit Rises By 22 Percent
Athi River Mining weathered the post-election disruption early in the year to register a 22 per cent growth in its pre-tax profit for the six months ended June 30.

Announcing the results on Wednesday, the company said its profit increased to Sh349 million up from Sh285 million recorded over the same period last year, while turnover grew from Sh1.8 billion in 2007 to Sh2 billion this year, representing an 11 per cent growth.


The firm said proactive measures put in place in the wake of the violence enabled it to avert loss of business. "There was, therefore, no impact on the performance of the company. The results are as per the budget," it said in a statement.

During the period under review, the cement division was the key driver accounting for 51 per cent of the total sales, but the fertiliser and lime divisions recorded most growth. The company said it faces a number of challenges despite current stability in Kenya.

It cited production costs that have risen due to the rising cost of fuel, power and other inputs. "These may be difficult to be passed on to the consumer in the short-term, and margins may therefore be affected," the statement said.

However, due to ongoing improvements and operational efficiency, the company expects to record good results in the next six months by benefiting from the expansion of its cement capacity.

The listed cement manufacturer said the Sh534 million generated from the operations increased from Sh432 million realised in 2007. However, these funds were re-invested.

Net borrowings increased to Sh378 from Sh149 million in 2007, of which Sh100 million was spent buying out minority shareholders at the company's Tanzania operation.

The remainder, Sh298 million, was invested in the ongoing capital expansion projects aimed at increasing the company's capacity.

The reorganisation of the ARM divisions into wholly owned subsidiary companies on January 1, 2009 would enhance resource allocation and valuation of the group,said the firm.


Source: Allafrica