NAIROBI, Kenya May 8 – Bamburi Cement group has recorded a 17 percent profit growth for the full year ended December 2019 despite experiencing challenging economic conditions in the region including the inability to access the Rwanda market.
The profit grew from Sh 0.62 billion(620 million) in 2018 to 0.73(730 million) recorded in 2019.
In a statement, Group Managing Director Seddiq Hassani attributed the profitability to the cost cutting and optimization initiative under the firm’s Building for Growth strategy.
Hassani said the cement manufacturer remained resilient despite the challenging economic conditions witnessed in the various markets and the wider regional economy.
The firm further noted that the Ugandan subsidiary, Hima Cement Ltd recorded improved domestic growth despite overall sales being negatively impacted by the inability to access the Rwanda market
The overall sales of the Kenyan subsidiary, the firm said, was also impacted by the shift of volumes previously exported to Uganda from Bamburi Cement, following the commissioning of Hima Cement capacity expansion project in 2018.
“Despite market challenges, including the absence of sales to Rwanda through Hima, the shelving of major infrastructural projects such as Phase 2B of the Standard Gauge Railway (SGR) project in Kenya, contraction of the Kenyan market and price erosion fueled by aggressive competitive pressure; both Bamburi Cement and Hima Cement grew share while sustaining respective market leadership. The Groups turnover at KShs 36.8 billion was comparable to 2018 performance, an indication of our underlying competitive resilience.” He said.
The increase in finance cost relates to the full year impact of interest on debt to finance the capacity expansion project commissioned by Hima Cement Ltd in 2018.
Despite the decline in the Kenya cement market, lower selling prices and the impairment of Rwanda assets, the Group’s Operating Profit still grew by 44 percent to KShs 1,117million as compared to KShs 775million in 2018.
In the wake of COVID 19 pandemic, Group Chairman John Simba said the firm remains cautious further assuring that it will continue to execute its Strategy 2022 agenda
The 2022 agenda is focused on our customers to drive topline growth, cost optimization, people, financial strength and sustainability.
“Our renewed focus will be placed on optimizing our production costs, logistics costs for both inbound and outbound transport flows, and to reduce the cost of our raw materials and cost of service to customers.’ He said