Bamburi Cement recorded a 25 per cent drop in comprehensive income after tax to Sh393million in their half year results from Sh399million recorded in the same period last year.
This is attributed to the tax benefit from the capacity expansion projects commissioned in the previous year.
As a consequence, the earnings per share grew to Sh1.61 from Sh1.47 in 2018.
Kenya and Uganda recorded mixed performance over the period.
In Kenya, cement sales have been impacted by the contracting cement market and a significant drop in cement uptake by the SGR project compared to same time last year when Phase 2A was still underway.
In Uganda, the closure of Rwanda border since early this year, rendered inaccessible the Rwanda market which contributes about 20% of Uganda revenues.
“Despite significant headwinds as a result of contracted cement market in Kenya and the inaccessibility of the Rwanda market, we have managed to hold the topline from declining,” said Seddiq Hassani, CEO Bamburi Cement.
Cash generated from operating activities at Sh1 billion was lower than same period prior year at Sh1.7 billion, mainly on account of lower operating profit.
Uganda closed the first half of 2019 in a net borrowing position, while Kenya remains cash positive.
Operating profit dropped to Sh0.3 billion in its half year from 1.2 billion recorded in 2018 because of lower profit margins on account of loss of sales in Rwanda following the closure of the Uganda/Rwanda border.
Higher depreciation charge following the commissioning of capacity expansion projects in both Kenya and Uganda effective mid last year also led to the drop in operating profits.
“In the second half of 2019, profitability is expected to progressively recover on account of a positive market outlook coupled by stringent cost containment initiatives,”the firm said in a statement.
However, the impact of the closure of the Uganda border with Rwanda is a downside risk and the Group hopes this matter will be resolved swiftly.
