Bamburi: operating profit plunges 24% YoY, Kenya

 Bamburi: operating profit plunges 24% YoY, Kenya
07 March 2014

Bamburi Cement’s 2013 turnover declined by 3.6 per cent to KES33.9bn while operating profit fell 24 per cent amid an increasingly competitive market.

Commenting on the company’s results, managing director Hussein Mansi, said: “In the first half of 2013, we experienced a drop in the company’s performance mainly attributable to competitive pressure in Uganda and we also saw a significant reduction of exports out of Uganda to the inland Africa markets due to political tensions, which impacted our overall performance.”

In its domestic market of Kenya, the Lafarge subsidiary saw a rebound in the second half of the year. A notable slowdown in the infrastructure segment was seen “due to delayed pamments to contractors on major projects,” Bamburi said in a statement.

To mitigate anticipated reductions in revenues, the company has implemented cost saving actions, increased its use of alternative fuels across its three plants and reduced reliance on purchased clinker.

2014: a ‘better year’
Bamburi expects 2014 to be a “better year” with easing political tensions in major inland Africa markets outside Uganda, as well as an improved business environment in Kenya which is already being witnessed.

The anticipated issuance of the Euro Bond by the Kenyan Government in 2014 is expected to spur infrastructure development. The group is also keen to identifying capacity increase opportunities in Kenya and Uganda in line with Lafarge’s announcement of 10Mt expansion in sub-Saharan Africa.

In Uganda, the company expects improved plant efficiencies to result in lower power consumption, to mitigate against rising power tariffs.  As well as raising its alternative fuel substitution rate, it has invested KES467m in a new petcoke mill in Uganda.

The company is also optimistic that a better power generation mix expected in Kenya in the 2nd half of 2014 may further ease power costs.  On the environment front, the successful commissioning of a KES275m new bag filter in Uganda, goes a long way to a sustained commitment to compliance to Global environmental standards,’’  explained Eric Kironde the Company’s Finance Director.  

“We are poised to take full advantage as the construction trends continue to favor our Global commitment of Building Better Cities, by delivering superior customer service, industrial excellence, with a committed work force and in a safe and healthy work place. I am confident that we are particularly well positioned to succeed in achievement of our objectives to fulfill our vision of providing world class construction solutions” concluded Mr Mansi.

Published under Cement News

Tagged Under: Bamburi Cement Kenya Uganda Results