Bamburi Cement Limited on Thursday reported an 83% increase in profits for the half-year ended June 2020 to Ksh721 million up from Ksh393 million posted at a similar period the previous year, the group’s unaudited results show.
Group Managing Director Seddiq Hassani attributed the growth in profits to a tax credit of Ksh508 million. The tax credit arises from the adjustment of deferred tax liability in line with the reduction of the corporate tax rate in Kenya from 30% to 25%.
Further, the group’s profit before tax for the first half of 2020 grew by 826% to Kshs213 million from Ksh23 million in 2019. The growth has been achieved despite the decline in the turnover in both Kenya and Uganda, the two markets that the manufacturer operates.
The group’s turnover in the first half of 2020 was Ksh16.2billion which is 13% lower than the previous year when it posted Ksh18.7billion.
The decline is attributable to the COVID-19 Pandemic and government instituted containment measures in the first half of 2020.
“These have impacted volumes adversely. Since the beginning of the pandemic, there has been a gradual decline in activity in the building and construction industry driven by construction site closures. Lower than the previous year selling prices have also been experienced due to change in product mix and prevailing market conditions,” said Mr. Hassani in a statement.
Cash flow generated from operations stood at Ksh3 billion during the period under review up from Ksh1.2 billion posted in H1 2019.
Working capital optimization initiatives, executed as part of COVID-19 impact mitigation measures, has seen the group current assets, mainly inventory and receivables, reduce significantly by Ksh1.4bn from the end 2019 position.
Earnings Per Share (EPS) increased to Ksh1.84 up from Ksh1.61.
The group’s board has not declared payment of a dividend as the company opts to preserve cash, a strategy adopted by many Kenyan companies with the COVID-19 pandemic showing no signs of abating going into the second half of 2020.