Bamburi Cement Group has recorded a Sh95million profit for the half year ended June 2022, an 87.7 per cent decline from Sh776 million reported in the same period in 2021.
The drop is mainly attributed to high operational costs, with operating profit standing at Sh210 million, almost five times lower than the Sh1.17 billion posted in the prior year.
Cash flow generated from operations was also lower, with a loss of Sh1.8billion compared to the prior year at Sh1.43billion.
“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,” the firm said in a statement.
In addition, the bottom line was adversely impacted due to an unrealized foreign currency loss of the Kenya shilling and Uganda shilling against other major currencies.
“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 optimization actions and sustainability initiatives,” Bamburi Cement Group Managing Director, Seddiq Hassani.
Seddiq underlined that Bamburi Cement will continue strengthening its efforts towards ramping up the usage of alternative fuels and executing operational strategies to reduce dependence on imported inputs making local markets self-sufficient while driving strong cash generation and consistent net profit margins.
Despite the drop in earnings, Bamburi defied economic odds to record a marginal growth in revenue during the period.
In the first half of the 2022 financial year, the Group recorded a revenue of Sh20.1 billion representing a 2.6 per cent increase from Sh19.6 billion posted in the corresponding period of 2021.
Looking ahead, the Company will continue to drive its strategy in a bid to maximize margin and optimize 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, Bamburi Cement Group Chairman.
Read also; Bamburi Cement Appoints Guillaume Dubreuil as Non-Executive Director.
