This archive report was first published on 25 August 2019.
The Standard Gauge Railway (SGR) slowdown and a dispute between Uganda and Rwanda have significantly impacted Bamburi Cement's earnings. The company's profit before tax in the six months to June 2019 dropped 96% to Sh23 million compared to Sh722 million over a similar half last year.
Higher finance costs of a loan taken for its Uganda operation and the dispute between Uganda and Rwanda, which has restricted the flow of its products to the country, are also at play. The company's net profit, however, narrowed marginally owing to tax rebates gotten following expansion on its plant.
Revenues grew marginally at Sh18.7 billion compared to Sh18.6 billion as at June 2018. Bamburi Chief Executive Seddiq Hassani attributed the decline in cement uptake by the SGR project to the completion of Phase 2A. He also noted that the Uganda operations were impacted by the continuing closure of the Uganda-Rwanda border, which has rendered the Rwanda market inaccessible.
Despite significant headwinds, the company managed to hold the topline from declining, thanks to the benefits accruing from the progressive successful implementation of its 'Building for Growth' strategy. The firm did not recommend an interim dividend for the period.
Published on August 25, 2019, in The Standard.
