Athi River Mining yesterday posted an increase of 64 per cent in its after-tax profit for the first six month to June 30. Surendra Bhatia, the firm’s Managing Director, announced that the profits-after tax had increased to Sh81 million, up from a low of Sh49 million". The earnings increase are before minority interest and translate to an annualised Earnings Per Share (EPS) of Sh1.74," he said. The group’s turnover grew by 31 per cent over the same period last year, driven by growth in all the divisions and increased capacity utilisation in the South African and Tanzanian subsidiaries.
By the close of the half-year period, the company had invested Sh548 million in new cement clinker plant at Kaloleni, in Mombasa. "Upon commissioning, the plant will substantially increase cement capacity and reduce production costs," Bhatia said. The company has also doubled its capacity for sodium silicate this year and is continuing to invest new capacity in the minerals division.
Despite the positive performance, ARM’s indebtedness has increased to Sh775 million. Increased borrowings have funded the expansion programme which has taken its operations to Tanzania, Zambia and South Africa. Bhatia said while profitability margins of the Kenyan operation had been driven by a positive economic growth, ARM’s other regional subsidiaries are currently operating at full capacity. "We have more orders, but we are limited to the capacity that is available," he said. He said the company would invest US$1.5 million on a second limekiln and increase the capacity of the Tanzanian operations. "This investment will take place after the on-going Sh1.2 billion expansion of the Kenyan operations are completed in the first half of 2006," he said.