ARM Cement’s profit up 28pc on construction boom

Entrance to the East Africa Portland Cement factory in Athi River. FI

By ISABELLA MUKUMU

In Summary

• ARM said its profit rose to Sh1.53 billion aided by a 32 per cent jump in turnover to Sh10.2 billion, reflecting the impact of East Africa’s construction boom.
• The cement maker forecast a 32 per cent growth in earnings this year on increased output in Tanzania due to a new plant.

ARM Cement Tuesday announced a 28 per cent rise in net profit for the nine months to September, boosted by higher sales.

ARM said its profit rose to Sh1.53 billion aided by a 32 per cent jump in turnover to Sh10.2 billion, reflecting the impact of East Africa’s construction boom.

The cement maker forecast a 32 per cent growth in earnings this year on increased output in Tanzania due to a new plant.

“Quarter three markets improved after election period in Kenya and Tanzania Rhino cement brand penetration helped to increase sales,” said Pradeep Paunrana in a telephone interview Tuesday.

“ARM Tanga plant now under completion and will have significant improvements in top and bottom lines.”

Construction has been one of Kenya’s growth sectors in recent years, fuelled by urbanisation, expanding middle class with higher disposable incomes and the pouring of billions in real estate by high-net worth investors.

Returns on investment in the sector have outpaced those of equities and government securities.

This has upped demand for cement, which helped East Africa Portland Cement Company post a net profit of Sh1.77 billion for the year to June compared to a loss of Sh972 million in the same period a year earlier.