The profit is in line with the performance achieved in 2015 despite ‘a highly competitive market, through expansion of innovative solutions, and continued effective cost management’.
Commenting on the Company’s results, the Board stated, “Our 2016 half year results further demonstrate the progress we have made in the Group to deliver consistent, competitive and responsible growth.”
The Group’s turnover for the period under review, however, dropped slightly to Sh19.1 billion from Sh19.3 billion. This slight decrease, 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.
In this half year, the Group paid out corporation taxes of Sh2 billion, up from Sh1.2 billion paid in the prior half year. Cash generated from operations in the half year was Sh2.3 billion, after tax payments.
The Board also announced the approval of Phase 1 of a capacity expansion project in both Kenya and Uganda, which will increase cement capacity by 1.7 million tonnes at an approximate cost of Sh8.3 billion, in order to serve its markets better.
The Board further stated that the Group is in advanced studies on embarking on Phase 2 of its expansion that aims to solidify the Group’s position as the lowest cost producer in the region.
Bamburi Managing Director Bruno Pescheux stated, “We are pleased to have delivered and sustained our first half results from what was achieved in the same period in 2015. The approval of the Phase 1 capacity increase investment decision highlights the Group’s confidence that the long-term outlook for the sector remains positive.”
“The expansion also underscores our belief of the continued projected growth in all East African economies, underpinned by a robust construction industry and that the demand for cement and cement related products is expected to continue to rise.Our focus will continue to be on our Customers providing them with innovative value adding propositions, combined with effective cost management, and to continue to remain flexible to anticipate and respond to external factors in the region,” he added.