Kenya-based Bamburi Cement has posted a 37 per cent YoY fall in net profit in 2019. Net profit declined to KES359m (US$3.39m) from KES572m in 2018.
The company attributed the decrease in profit to reduced domestic cement consumption, low prices and an inability to access the Rwandan market due to the closure of the border with Uganda, denying its Uganda subsidiary Hima Cement access to the Rwandan market early last year.
Bamburi’s revenues slipped by 1.2 per cent to KES36.79bn in 2019 from KES37.26bn in 2018 due to the slowdown in the construction sector following the completion of the Standard Gauge Railway (SGR) Phase 2A. Moreover, the company had also expected to participate in the SGR Phase 2B to Kisumu, but this project was suspended.
“Despite market challenges, including the absence of sales to Rwanda through Hima, the shelving of major infrastructural projects such as Phase 2B of the SGR project, contraction of the Kenyan market and price erosion fuelled by aggressive competitive pressure; both Bamburi Cement and Hima Cement grew share while sustaining respective market leadership,” said Seddiq Hassani, group managing director.“The group’s turnover at KES36.8bn was comparable to 2018 performance, an indication of our underlying competitive resilience.”
Cement consumption in Kenya declined 2.5 per cent YoY in 2019 while output from the country’s cement plants dipped to 5.9Mt in 2019 from 6.1Mt in 2018.
Published under Cement News