Bamburi Cement has reported a profit before tax of Ksh. 124 Million for the half year 2022, this is an 88% decrease from the Ksh. 1,109 Million reported in a similar period last year.
The drop in profitability was mainly influenced by the high operational cost with operating profit standing at KES 210 million from KES 1,179 million prior year. Cash flow generated from operations was lower at KES (1,810) million compared to the prior year at KES 1,436 million. The H1 2022 position reflects additional investment in working capital due to inflation of input prices compared to the closing December 2021 position.
The Group’s earnings were significantly hit by a jump in direct production costs driven by rising local and global inflationary pressure on input resources including fuel, logistics and imported clinker in both Kenya and Uganda thus adversely impacting the operating profit. In addition, the bottom line was adversely impacted due to an unrealized foreign currency loss of the Kenya shilling and Uganda shilling against other major currencies.
At the same time, the company recorded a revenue of KES 20.1 billion representing a 2.6 per cent increase from KES 19.6 billion posted in the corresponding period of 2021. Unaudited results for six months ended 30th June 2022 show that the Group’s turnover was mainly supported by volume growth along with improved average selling price compared to prior period.
Mr. Seddiq Hassani, Bamburi Cement Group Managing Director said that, “We started the first quarter on positive volume and price performance emerging resilient from the last two years that taught us adaptability and operational efficiency. Despite closing H1 2022 in the midst of a very volatile economic environment, we remain optimistic that Bamburi Cement is well positioned to deliver superior shareholder value and profitability, while meeting market demand as continuous focus remains on strategic cost optimization actions and sustainability initiatives. It is my belief that the manufacturing sector can paint a true reflection of the region’s economic temperature given the events of the past two years and including the general elections in Kenya this year.”
Mr. Seddiq however underlined that Bamburi Cement will continue strengthening its efforts towards ramping up the usage of alternative fuels and executing operational strategies to reduce dependence on imported inputs making local markets self-sufficient while driving strong cash generation and consistent net profit margins.