, NAIROBI, Kenya, Aug 7 – Bamburi Cement Limited has posted a 28 percent drop in its first half of 2014 pre-tax profit to Sh2.3 billion from Sh3.2 billion recorded over the same period in 2013.
The group attributed the drop to the rising power costs and a higher use of imported clinker in both Kenya and Uganda and the introduction of a mining levy in Kenya.
The cement maker posted a 30 percent drop in operating profit to Sh2.2 billion compared to last year’s Sh3 billion.
However, the group turnover for the period under review grew to Sh17.3 billion from Sh15.8 billion as a result of a rise in sales volumes in the first half of the year in both domestic markets and inland Africa exports markets.
“We are optimistic that the business environment will progressively improve in the second half of the year as the East African regional economies grow briskly while demand for cement and cement related products is expected to rise, ” stated the Group Finance Director Eric Kironde.
Kironde said the group will continue working with East African Community (EAC) member states to create conducive operating conditions by addressing business challenges.
“In addition, increased urbanisation plus demand for housing and good commercial properties in the urban centers is expected to continue to drive commercial, private and infrastructural development, thus we expect these segments will continue to increase cement consumption,” said Kironde.
He said the cement manufacturer plans to capitalise on private, commercial and infrastructure projects to ramp up sales and improve industrial productivity to meet customer expectations.
Bamburi’s ongoing cost reduction initiatives, he said, would cushion the company from expected top line pressure and improve operating profit in the long-term.
“The investments made in sourcing alternative sources in energy including the pet coke project in Uganda which was commissioned in January 2014, and ramping up on its alternative fuels substitution rate to higher levels in both Kenya and Uganda, will go a long way in improving efficiency levels thus contributing to its profitability in the remainder of the year,” he stated.