[2008-08-25]  Bamburi Cement posts Sh2bn net profit
Strong recovery of Kenya’s construction industry in the second quarter of the year after the post-election violence scare helped Bamburi Cement Group improve its financial performance for the half-year period ending June 30, 2008 to post after tax profit of Sh2 billion compared to Sh1.59 billion posted in the first half of 2007.

The group’s operating profit went up to Sh2.9 billion, a 21 per cent increase compared to the same period last year. Overall turnover increased from Sh10.5 billion to Sh11.4 billion, a nine per cent increase during the period under review.

The results were achieved despite “very challenging period” following the post election situation and its impact on the economy, said Bamburi Cement Group chairman, Richard Kemoli.

Market recovery
He said inflation rates rose to levels unseen in the recent past, putting further pressure on business activities across the region. Export sales to Uganda were lower as a result of access disruption during the first quarter of the year, but strong market recovery in Kenya during the second quarter of the year helped increase sales.

The financial statement shows the cement maker experienced significant cost increases compared to the prior year with high increase in power, fuel-oil prices and freight rates resulting in huge operational challenges.

“There was further negative impact due to poor power quality in Uganda, long shutdown in Hima plant due to fuel shortage and increased use of purchased clinker in Uganda to meet increased market demand,” notes the financial statement.

Despite these setbacks, the statement shows the group’s operating profit remained solid attributed to benefits from earlier productivity investments resulting in improved production, shorter plant shutdowns in Mombasa as well as cost optimisation initiatives launched in 2006.

During the six months to June 2008, the group launched a Sh400 million clinker cooler project at the Mombasa plant, and 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 Sh7 billion to double our capacity. This project is due for completion by 2010,’’ said Bamburi’s managing director, Michel Puchercos.

The board of directors proposed an interim dividend of Sh3.20 per ordinary share amounting to Sh1.2 billion which is payable on or about November 6, 2008. Earnings per share went up 29 per cent to Sh5.3 billion, while the group’s tax charge, due to both the Kenya and Uganda governments, increased by 36 per cent to Sh0.9 billion.


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