NAIROBI, Kenya, Aug 28 – Bamburi Cement has posted an increase in its after–tax profit to Sh721 million in the first half of the year, up from Sh393 million posted during a similar period last year.
The cement manufacturer said the improved performance was on account of tax credit, amounting to Sh508 million.
The tax credit rose from the adjustment of deferred tax liability in line with the new corporate tax rate in Kenya of 25 percent.
The Group’s turnover however dropped by 13 percent to Sh16.2 billion, down from Sh18.7 billion.
The company’s Chair John Simba said the decline was due to the effect of 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,” he said.
At the same time, lower than prior year selling prices were experienced due to changes in product mix and prevailing market conditions.
Additionally, working capital optimization initiatives, executed as part of COVID-19 impact mitigation measures, saw the group current assets, mainly inventory and receivables, reduce significantly by Sh1.4 billion from the end 2019 position.
“Consequently, the Group’s liquidity and balance sheet remain solid with a good foundation for future leveraged growth. Interim Dividend The board does not recommend the payment of an interim dividend for the Financial Year 2020.”
Going forward, Simba said the adverse impact of COVID 19 pandemic to carry on into the second half of 2020.
He added that its priority continues to be the implementation of necessary measures to enhance business resilience and to protect the health and safety of employees and their families.
“These measures are delivering results as the group is registering cost savings and improved cash generation to counter the decline in topline.”