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Bamburi pays higher dividend despite profit drop

NAIROBI, Kenya, Mar 6 – Bamburi Cement has recorded a 19 percent decline in its 2013 pre-tax profit to Sh5.5 billion compared to Sh6.8 billion posted in 2012.

Commenting on the company’s results, Managing Director Hussein Mansi said in the first half of 2013, performance dropped mainly due to competitive pressure in the Uganda business.

“We saw a significant reduction of exports out of Uganda to the inland Africa markets due to political tensions, which impacted our overall performance,” he said.

In Kenya, the company also saw a notable slowdown in the infrastructure segment in the first half, due to delayed payments to contractors on its major projects.

“We put in place several measures to mitigate against foreseen reduction in revenues through innovative cost saving actions, increased alternative fuel substitution across our the three plants and reduced reliance on purchased clinker compared to 2012 in Kenya. We also continue to leverage on our strong brand equity, strengthened our route to market across all markets in Eastern Africa,” Mansi explained.

Despite the performance decline, Bamburi Cement shareholders will take home a final dividend of Sh9 per share up from Sh8.50 in 2012.

The company expects 2014 to be a better year with easing political tensions in major Inland Africa markets out of Uganda, as well as an improved business environment in Kenya which the company has already started witnessing.

“The anticipated issuance of the Euro Bond by the Kenyan Government in 2014 is expected to spur infrastructure development,” Mansi said.

In Uganda, the company expects improved plant efficiencies to result in lower power consumption, to mitigate against rising power tariffs.

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”We invested Sh467 Million in a new Pet coke mill in Uganda and increased alternative fuel substitution in both Kenya and Uganda, which will realize a reduction in energy costs in 2014 as these measures gain momentum.

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