comp
Bamburi Cement profits down 87% to Sh181m
Friday, April 28, 2023
A cement truck leaves the Bamburi factory in Mombasa. file image | NMG
Bamburi Cement’s net profit for the year ending December 2022 fell 86.9% to Sh181m due to lower sales and higher costs.
The Nairobi Stock Exchange-listed company’s net profit declined from Sh1.38 billion in the previous year as sales fell six percent to Sh38.99 billion.
Operating costs totaled 38 billion shekels from 39.2 billion shekels, which is roughly the same as sales for that period.
Bamburi said the slowdown in economic growth has dampened cement sales while rising inflationary pressures have pushed up costs for energy, fuel, transportation and raw materials.
High inflation affected the cost of building materials, which negatively affected the demand for cement. The conflict in Eastern Europe has affected global supply chains, greatly increasing ocean freight and the cost of raw materials.
Net financing costs nearly doubled from Sh143m to Sh224m to pile pressure on bottom line.
The board proposes a dividend of 0.75 shillings per common share, amounting to 272 million shillings, down 79 per cent from the 3.75 shillings per share or a total of 1.3 billion shillings paid out in 2021.
In November, Bamburi issued a profit warning to prepare investors for a profit drop of more than 25 per cent in line with CMA rules.
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Although inflation remains above the government’s target range of 2.5 percent and 7.5 percent and supply chains continue to experience disruptions, the board is looking forward to a turnaround in performance this year.
“We are aware of the current challenging operating environment. However, we remain steadfast in our efforts to drive positive performance in 2023.
Last month, Bamburi Cement appointed Mohit Kapoor as its new CEO, following the exit of Seddik Hasani after five years at the helm.