Increasing demand leads to higher dividend payouts, East Africa

Increasing demand leads to higher dividend payouts, East Africa
Published: 07 November 2011

Nairobi Securities Exchange listed cement makers Bamburi Cement and Athi River Mining are expected to realise higher cash return from their operations in the next three years, as demand for cement in the region rises.

This, analysts said should help the two firms aggressively fund their expansion and pay shareholders higher dividends by 2013.

East African states are pumping billions of dollars into upgrading their infrastructure, raising the demand for building materials.

Rising cement demand has attracted new firms while established players have either been reinvesting their cash to expand or paying out higher annual dividends to shareholders.

Renaissance Capital, in their latest research report released last week on the two cement makers, expect Bamburi Cement to generate excess cash in 2011 and 2012 which will be paid out to shareholders.

“We expect the operations of Bamburi’s plants to generate excess cash and we believe that this could well be returned to shareholders by way of an attractive dividend yield,” Renaissance Capital analysts said estimating the cement firm will have a dividend yield of 12 per cent for the full year 2012 results.