Bamburi's profits dip 13.5pc to Sh2.5bn

Bamburi Cement’s net profits dipped 13.5 per cent in the first half of 2012 compared to the same period last year which the management attributed to high cost of transport and energy.

Total profits dropped from Sh2.9 billion in first half of 2011 to Sh2.5 billion in first six months of 2012.

Revenue grew 17 per cent to Sh19.2 billion with sales in the domestic and export markets growing by 5.4 per cent and 32.2 per cent respectively.

“The group’s operating profits reduced by 9 per cent to Sh3.6 billion due to an extremely difficult cost environment as a result of volatility of global fuel prices resulting in high raw material and transport costs,” said the firm in a statement to the bourse.

Standard Investment Bank (SIB) estimates that Bamburi’s market share could drop to 38 per cent from the current 40 per cent by 2015.

East Africa Portland’s market share is expected to drop from 24 per cent to 18 per cent, while Athi River Mining to gain from 15.5 per cent to 16 per cent in the same period.

Analysts at Kestrel Capital say Bamburi’s market share is likely to come under increased pressure as new market entrants expand their capacity in the region.