Bamburi Cement has issued a warning to shareholders indicating that its profit for the year ended December 2023 will plunge by 25 per cent compared to 2022.
“The expected decline in net earnings is largely attributable to the one-off settlement of outstanding tax liabilities and legal disputes in Hima Cement Limited in Uganda as part of the closure of the sale transaction thereby impacting 2023 results,” the firm said in a notice published Tuesday.
The listed cement maker said its projected net earnings for 2023 will be lower by at least 25 percent of the Sh181 million it posted in 2022. This means earnings will not surpass Sh135.8 million.
Bamburi sold its entire 70 per cent stake in the Ugandan subsidiary, Hima Cement for an estimated Sh12.3 billion, a deal that was closed last month.
The firm has been battling a Sh1.2 billion tax pressure in Kenya and Uganda. The firm said Kenya declined its application for penalties and interest waiver worth Sh288 million.
The penalties arose from a tax assessment from 2007 to 2011.
The Sh181 million booked in 2022 was a 86.9 per cent drop compared to the previous year, a level last seen 33 years ago, on the back of reduced sales and increased costs.
In August, Bamburi posted a drop in net profits to Sh88 million for the first half of 2023.
Although it had increased its pre-tax profits to Sh621 million, in the period from Sh124 million in 2022, a Sh533 million tax weighed down the gains leading to a drop in profitability.
Bamburi now joins six other listed firms at the Nairobi Securities Exchange (NSE), which expects their profit margins to drop by a quarter compared to 2022.
They include Express Kenya Limited in December, Longhorn Publishers, Sameer Africa, Centum Investment Company, Crown Paints, WPP Scangroup, Longhorn Publishers, Sasini, Car & General, Nation Media Group and Unga Group.
