Bamburi Cement posted a drop in net profit in 2019 to KSh 359 Million from KSh 572 Million net profit booked in 2018.
The manufacturer suspended its operations in Rwanda a factor that led to the decline in revenues. Additionally, the interruption in construction of the Standard Gauge Railway(SGR)line phase (II) hit its revenues.
Revenues fell to KSh 36.8 Billion from KSh 37.3 Billion during the period under consideration.
The Group registered a 74% drop in Total Comprehensive Income from KSh 1.3 Billion to KSh 350 Million, a drop of KSh 998 Million.
In 2018, Bamburi Cement Limited (Bamburi) and Hima benefited from investment deduction allowances after commissioning the capacity expansion projects. In 2019, only Bamburi continued to enjoy the residual allowances as Hima’s was only applicable to 2018.
“The absence of the investment deduction allowance benefit for Hima in 2019, plus the suspension of Rwanda operations, led to a higher tax charge in 2019,” said Bamburi Cement in a statement signed by its Board Chairman Dr John Simba and Group MD Seddiq Hassani.
The Group’s non-current assets amounted to KSh 36.9 Billion compared to KSh 37.9 Billion in 2018.
In its outlook, Bamburi expects the East African cement markets to grow given the excess capacity already invested by cement manufacturers. But the COVID-19 pandemic will affect demand for cement in Uganda and Kenya, the Group’s key markets.
Established in 1951 as Cementia Holdings A.G Zurich, Bamburi Cement Limited acquired a significant stake in Hima Cement Ltd, which has a factory in Kasese, Western Uganda. Today, the cement maker has clinker capacity of 1 million tons and cement production capacity of 2.5 million tonnes. Its market capitalization is close to US$ 1 billion.
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