By The COAST Reporter
Bamburi Cement Group has registered a 22 per cent growth in its pretax profit for the year 2021.
Its just issued 2021 Financial Year results shows it made a pre-tax profit of Kes 2.2 billion.
That translates to a 22.3% year-on-year increase from Kes 1.8 billion posted in 2020.
The company’s impressive result is on the back of positive volume and price performance coupled with robust cost management through various cost initiatives and operational efficiencies, the firm says.
The performance also reflects the continued economic recovery from impact of the Covid-19 pandemic particularly in the construction sector.
The Group’s Turnover increased by 19% from Kes 34.9 billion to Kes 41.4 billion. This was attributed to growth in retail and key account segment in both Kenya and Uganda.
Domestic selling price in Kenya improved compared to prior year due to higher proportion of premium products sales and targeted price actions in the retail segment.
On the other hand, the cement maker’s operating Profit for the year grew by 17% to Kes 2.3 billion from Kes 2.0 billion.
This was achieved despite 2021 being an inflationary year with prices of coal, power, imported clinker and global fuel increasing and adversely affecting the company’s cost base.
The company’s net profit was Kes 1.38 billion, 22.2% higher than the previous year. With this, the board has recommended a dividend payout of Kes 1.38 billion at the rate of Kes 3.58 per ordinary share subject to shareholders’ approval in the upcoming Annual General Meeting.
Mr Seddiq Hassani, Bamburi Cement Group Managing Director, says: “We made substantive progress on our strategic cost optimization actions and sustainability initiatives leading to high levels of operational efficiency and the 17% increase in our operating profit.
As the cost of input raw materials continues to rise excessively, we will continue implementing these initiatives”.
“Our commitment towards innovation aimed at achieving better returns for our shareholders continues. For example, one of the investments made was looking to fill a gap in the untapped specialized mortar segment and Bamburi TectorCeram SETI 300, a ready-to-use tile adhesive under this range has been launched this year.
“We have also been gradually embarking on the switch to green solar energy as part of our efforts towards saving on power costs and contributing to Net Zero goals,” he added.
Mr Hassani said the company envisages growth in cement demand supported by stable economic environment.
In Uganda, cement demand is expected to be fueled by greater investment in public infrastructure especially in the oil industry. However, the impact of the closure of the Uganda – Rwanda border is a downside risk though positive signs on the reopening have been observed at the beginning of 2022.
He is also optimistic about further growth in exports with the admission of Democratic Republic of Congo to the EAC.
Four Agenda Factor
On his part, Dr John Simba, the Bamburi Cement Group Chairman said: “In Kenya, the big four government agenda in the areas of affordable housing and significant investments in infrastructure projects in the pipeline (roads, railways, ports, special economic zones) is expected to fuel the growth of cement market.
“However, the impact of the coming general election is an unquantified risk factor which potentially might impact market dynamics”.