NAIROBI, Kenya, Aug 25 – Bamburi Cement has posted a 36 per cent decline in its half-year net profit to Sh1.8 billion compared to a Sh2.8 billion recorded in the first six months of 2016.
Turnover stood at Sh17.5 billion which is Sh1.6 billion behind prior year while operating profit reduced from Sh4.1 billion to Sh2.7 billion.
Management attributes the decline to a difficult business environment in Kenya characterised by a contracting market, low private sector investment resulting in a slump in construction activity especially in the individual home builder segment and drought conditions.
In contrast, Uganda enjoyed better market conditions in both domestic and export markets with Hima recording a good performance.
On the outlook, the firm projects that the Kenyan market is expected to rebound in the last quarter while the Ugandan market is expected to continue performing well in line with the projected growth in both the domestic and regional markets.
The Board of Directors recommends payment of an interim dividend of Sh2.50 per ordinary down from the Sh6.00 per ordinary share paid in 2016.
“The interim dividend is proposed to be paid on or about October 27 to members on the register at close of business on September 22. Accordingly, the register of members will close at 4.30pm on September 22 and will remain closed up to September 25,” the firm said.
The firm has planned to boost its production capacity to 3.2 million metric tonnes in its two plants in Mombasa and Athi River.
The additional production will come after the completion of a Vertical Cement Mill in its Athi River plant, the first of its kind in the country to use this technology in cement manufacturing.
The civil works of the new grinding line will be completed mid next year as part of a Sh4 billion expansion plan.
“While the underlying business remains solid in Kenya, the market faced softening demand. However, we expect the Kenyan market will rebound in the last quarter while the Ugandan market is expected to continue performing well in line with the projected growth in both the domestic and regional markets,” The Managing Director Bruno Pescheux said in a statement.