Athi River Mining profits jump 63 per cent, Kenya

Athi River Mining profits jump 63 per cent, Kenya
Published: 18 July 2007

A significant reduction in manufacturing costs has seen Athi River Mining record a 63 per cent increase in its profits before tax to Sh285 million for the half-year period ended June 30.

The firm recently invested in projects aimed at increasing its manufacturing capacity. As a result, turnover rose by Sh620 million to Sh1.86 billion in the period.

In a statement, the company says that investment in a new clinker plant has improved the firm’s gross margin by two per cent.

Net profits for the six-month period increased by 69 per cent to Sh185 million, giving an earnings per share of Sh3.98.

Athi River has also acquired additional shareholding in its Tanzanian subsidiary, which is currently undergoing capacity expansion at a cost of Sh50 million.

The firm’s directors predict a strong full year performance supported by the robust construction activity going on in the region.

"The Kenyan economy continues to see a robust growth in the construction and industrial sectors, similar growth is being experienced in East and Southern Africa regions and we expect to perform well for the rest of the year," read the statement in part.

No interim dividends will be paid to the shareholders.

Meanwhile East African Cables has also reported a 47 per cent increase in its pre tax profits to Sh285 million for the six-month period to June 30.

The cables manufacturer has embarked on an expansion programme with the ongoing construction of a new factory in Nairobi and purchase of new equipment.

The Group’s turnover increased by 85 per cent to Sh1.6 billion as the company continued to focus on regional markets.

In a press statement the management cited continued volatility in world metal prices and increased international competition as some of the challenges facing the Group.