Bamburi Cement posted 85.9% jump in net profit for half-year ended June 30 to Ksh3 billion compared to Ksh1.6 billion a year earlier, helped by sales growth and aggressive cost-cutting measures, but retained dividend pay at Ksh6 it paid last year.
This came as sales rose 11.7% to Ksh19.3 billion, with costs dropping drastically to result in the operating profit jumping 82.5% to Ksh4 billion.
“Following strong growth in its primary markets together with better cost optimisation and environment, the group recorded strong growth in the first half of 2015 compared to the same period in 2014,” Bamburi said in a statement. “The group, having benefited tremendously from prior cost and process improvement initiatives, will continue with such initiatives.”
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The cost-cutting strategies included reduction in staff numbers. The firm said it benefited from increased demand in Kenya and Uganda’s infrastructure and contractor segments, stable macro-economic indicators in both countries and strong inland Africa export markets.
The performance saw the company declare an interim dividend of Ksh6 per share, same as the payout on the same period last year. The dividend is expected to be paid by October 30, with the shareholders’ register set for closure from September 25 to 28.
The company’s share price has gained 11.5 per cent since the start of the year to trade at Sh155, making it one of the few NSE-listed firms to post higher earnings and stock price in the merging bear run. Bamburi reported zero finance costs, avoiding the loan repayment burdens that pulled one of its biggest rivals ARM Cement into losses in the same period.
ARM made a net loss of Ksh355.8 million in the half year, largely due to higher finance costs and provisions for forex losses, reversing the net profit of Ksh847.2 million a year earlier.
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