Bamburi Cement posts 88% drop in 1H profits

Kenya-based Bamburi Cement Ltd reported a profit of KES95m (US$0.79m) for the January-June 2022 period, 87.7 per cent down from KES776m in the 1H21. However, the group posted a revenue of KES20.1bn, up 2.6 per cent YoY from KES19.6bn in the 1H21.

The company has attributed the decrease to high operational costs with operating profit in the 1H22 almost five times lower at KES210m when compared with KES1.17bn in the 1H21.

“The Group’s earnings were significantly hit by a jump in direct production costs driven by rising local and global inflationary pressure on input resources including fuel, logistics and imported clinker in both Kenya and Uganda thus adversely impacting the operating profit,” Bamburi Cement said in a statement.

Furthermore, unrealised foreign currency loss of the Kenyan and Uganda shillings when compared with other major currencies also impacted company profit.

“Despite closing H1 2022 in the midst of a very volatile economic environment, we remain optimistic that Bamburi Cement is well positioned to deliver superior shareholder value and profitability while meeting market demand as the continuous focus remains on strategic cost optimisation actions and sustainability initiatives,” Bamburi Cement Group Managing Director, Seddiq Hassani.

The company plans to increase alternative fuel use and implement operational strategies to reduce dependency on imported inputs, making local markets self-sufficient while driving strong cash generation and consistent net profit margins.

“Looking ahead, the company will continue to drive its strategy in a bid to maximise margin and optimise the cost base so as to drive profitability. The Kenya cement market is expected to recover after the general elections while in Uganda, cement demand is anticipated to be fueled by greater investment in public infrastructure, especially in the oil industry.” Dr John Simba, chairman of Bamburi Cement Group.