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HomeINDUSTRYBamburi Cement's Profit Dips by 87% to Sh181 Million

Bamburi Cement’s Profit Dips by 87% to Sh181 Million

Bamburi Cement’s Profit Dips by 87% to Sh181 Million

Bamburi Cement has experienced a significant decline in its net profit for the year ended December 2022, with a drop of 86.9 percent to Sh181 million due to decreased sales and increased expenses.

This marks a significant decrease from the previous year’s net earnings of Sh1.38 billion. Sales also decreased by six percent to Sh38.99 billion.

The company’s operating costs totaled Sh38 billion, which is almost equivalent to its sales for the period, down from Sh39.2 billion.

Bamburi Cement attributed the decline in sales to the economic slowdown, which resulted in reduced cement sales, while the rising inflationary pressures led to increased power, fuel, transport, and raw materials expenses.

“The soaring inflation impacted building materials cost, thereby adversely impacting cement demand. The conflict in Eastern Europe impacted global supply chains, consequently leading to significant increase in sea freight and cost of raw materials,” said the firm.

The net finance costs have almost doubled from Sh143 million to Sh224 million, adding pressure on the net earnings of the company.

The board of Bamburi is suggesting a dividend payment of Sh0.75 per ordinary share, which would total to Sh272 million. This marks a significant decrease of 79 percent from the Sh3.75 per share, totaling Sh1.3 billion that was paid out in 2021.

The company had previously issued a profit warning in November, which was in compliance with the Capital Markets Authority rules, to inform investors about the anticipated decline in profit of over 25 percent.

Although inflation is still above the government’s target range of 2.5 percent to 7.5 percent and supply chains are still experiencing disruptions, the board is optimistic about a turnaround in the company’s performance for the current year.

The firm acknowledged the challenging operating environment and expressed its determination to achieve positive performance in 2023. Bamburi Cement recently appointed Mohit Kapoor as the new CEO in the previous month, after Seddiq Hassani’s departure, who had been at the company’s helm for five years.

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Bamburi Cement’s Profit Dips by 87% to Sh181 Million

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