Economic recovery improves Bamburi Cement’s profits
Bamburi Cement recorded a net profit of $14 million in 2021, compared to $11 million the previous year. The increase was driven by higher sales volume in Kenya and Uganda thanks to a strong performance in the retail and large account segments.
The significant increase is also attributed to the continued economic recovery from the impact of the Covid-19 pandemic.
The group’s pre-tax profit for 2021 rose to $22 million, 22.2% higher than in 2020, mainly due to higher growth in operating profit.
The listed cement maker’s revenue for the year 2021 rose 19% to $414 million, from $349 million in 2020.
The domestic selling price in Kenya increased from the previous year due to increased sales of premium products and targeted pricing actions in the retail segment.
The cement maker’s operating profit for the year rose 17% to $23 million from $20 million. This was achieved despite 2021 being an inflationary year with coal, electricity, imported clinker and global fuel prices increasing and negatively affecting the company’s cost base.
Bamburi Cement Group Managing Director Seddiq Hassani said the company’s result was driven by positive volume and price performance coupled with cost management through various cost initiatives and operational efficiencies. .
“We made substantial progress in our strategic cost optimization actions and our sustainability initiatives, which led to high levels of operational efficiency and a 17% increase in our operating profit. As the cost of incoming raw materials continues to rise excessively, we will continue to implement these initiatives,” Hassani said.
He added, “Our commitment to innovation aimed at achieving better returns for our shareholders continues. For example, one of the investments made sought to fill a gap in the untapped segment of specialist mortars and Bamburi TectorCeram SETI 300, a ready-to-use tile adhesive in this range, was launched this year. We have also gradually embarked on the transition to green solar energy.
Hassani said the company envisions growth in cement demand supported by a stable economic environment.
In Uganda, cement demand is expected to be fueled by increased investment in public infrastructure, particularly in the oil industry.
Hassani also expressed optimism that exports will continue to grow with the admission of the Democratic Republic of Congo to the EAC.
Bamburi Cement Group chairman John Simba said in Kenya that the Big Four government’s program is expected to lead to growth in the cement market.
In Uganda, cement demand is expected to be fueled by greater investment in public infrastructure, particularly in the oil industry.
Mr Simba, however, expressed concern this year that the company could be affected by rising political tension in Kenya.
“The impact of the upcoming August 9 general election is an unquantified risk factor that could potentially impact market dynamics,” Simba said.
Bamburi Cement Plc Board of Directors recommends paying a first and final dividend of $0.035 per ordinary share amounting to $13 million, compared to $0.03 per ordinary share amounting to $11 million in 2020 .