Bamburi Cement Limited announced results for the half year ended 30th June 2015 with the following highlights:
- Following sturdy growth in its primary markets coupled with better cost optimisation and environment, the group reported a robust revenue growth in the first half of 2015 compared to the same period in 2014. Turnover propped up by 11.7% to KES 19.32 billion from KES 17.29 billion.
- Operating profits increased by 82.5% to KES 4.03 billion from KES 2.21 billion bolstered by the growth in sales, a better external cost environment together with the positive impact of the progressive cost initiatives and process improvement measures adopted across the Group’s operations in both Uganda and Kenya.
- The cement manufacturer posted a profit before tax of KES 4.50 billion; a 93.6% rise from KES 2.33 billion (HY14) buoyed by an increase in the foreign exchange gains on dollar denominated liquid assets and a decline in the finance costs. This resulted in an 85.95% rise in profits after tax to KES 3.08 billion as of June 2015.
- The net cash generated from operating activitiesstood at KES 4.14 billion largely reinforced by a continued sound management of working capital.
- The current ratio weakened slightly from 1.12x (HY14) to 1.01x (HY15) as the slight improvement in current assets was outweighed by the current liabilities. Profitability ratios on the other hand improved with ROA edging up to 6.99% (HY15) from 3.66% (HY14) while the ROE went up to 10.73% (HY15) from 5.41% (HY14). This is a clear indication that the company is growing its value at an acceptable rate whilst also generating more profits for every shilling of its assets.
- The board of directors recommended the payment of an interim dividend of KES 6.00 which translated to a dividend payout of 77% and a dividend yield of 3.9% which is quite attractive for investors inclined on dividend-yielding stocks. The book closure date is set for 25th September 2015.
Outlook:
The outlook for the rest of 2015 is stable, with projected and continued positive growth in all regional East African economies underpinned by a robust construction industry. The Group will remain focussed on strengthening their activities to exceed customer expectations through innovations, across all their operations.
Favourable debt levels has also continued to enhance their profitability position in comparison to their other cement peers in the region. However entry of new players such as Dangote into the regional market is set to heighten the price wars.
