Bamburi Cement profit down on reduced demand

Money Markets

A truck leaving the Bamburi Cement factory in Mombasa. PHOTO | FILE 

By CHARLES MWANIKI, cmwaniki@ke.nationmedia.com

Bamburi Cement net profit declined by six per cent for the six months of 2016 to Sh2.9 billion following lower cement demand from the housing construction sector and regional export market.

Bamburi saw its turnover fall from Sh19.3 billion in the 2015 comparable period to Sh19.1 billion this year.

Exchange losses on its dollar-denominated assets meant that its profit declined in spite of operating expenses falling from Sh15.3 billion to Sh15 billion.

The company had reported a positive exchange position last year due to shilling weakening to the dollar, but this year has had to contend with a stronger shilling.

“This decrease (in turnover), felt in the first quarter of 2016, was due to slowed construction activity, mainly in the individual home builder segment in Kenya, which was affected by the higher level of interest rates experienced in the last half of 2015, together with the slight reduction in exports to inland African markets,” said Bamburi in a statement.

The cement manufacturer’s cash holdings stands at Sh10.5 billion compared to Sh11.4 billion at the same period last year.

Bamburi, which is Kenya’s largest cement manufacturer, expects to undertake major capital expenditure in coming months after its board approved the first phase of a capacity expansion project in Kenya and Uganda which, at a cost of Sh8.3 billion, will see the firm increase its production capacity by 1.7 million tonnes.