An engineer from Bamburi Cement shows how concrete is tested on site. PHOTO | FILE
Cement maker Bamburi has reported a 50.4 per cent jump in net profit to Sh5.8 billion for the year ended December, in a sharp contrast to the fortunes of its NSE-listed rivals ARM Cement and EAPCC which are in the red.
The company’s performance was boosted by growth in sales to private contractors and the government which is spending billions of shillings on construction of roads and the standard gauge railway.
“Group turnover for the period under review grew to Sh39.2 billion from Sh36 billion in 2014, bolstered by strong growth in the infrastructure and contractor segments,” Bamburi said in a statement.
The company’s performance comes as ARM announced a net loss of Sh469 million in the nine months ended September, largely weighed down by finance costs and forex losses.
The State-owned EAPCC on the other hand announced a net loss of Sh531 million in the half year ended December, also affected similar problems.
Bamburi declared a final dividend of Sh7 per share, bringing the total payout to shareholders to Sh13 per share-- equivalent to Sh4.7 billion.
This is a one shilling increase over the previous year when the cement manufacturer paid a total dividend of Sh12 per share. The cement maker’s share price has gained 20.5 per cent over the past one year to trade at Sh193, making it one of the few listed firms to post higher earnings and stock price growth in the bear run that has gripped the Nairobi bourse in recent years.
More than 18 other Nairobi Securities Exchange-listed firms have announced or are expected to post losses or huge profit declines.
Bamburi reported zero finance costs, avoiding the loan repayment burden that has pulled one of its biggest rivals, ARM Cement, into losses.
ARM’s short term debts jumped 35 per cent to Sh14.4 billion in the nine months ended September, raising its finance costs 3.3 times to Sh1.1 billion.
The company also saw its unrealised foreign exchange losses increase 15.5 times to Sh2 billion, with sales rising at a slower rate of seven per cent to Sh11.7 billion.
Its share price has dropped 64 per cent over the past one year to trade to the current range of Sh30 apiece.
ARM is set to raise Sh12.7 billion from an institutional investor who will be issued with convertible preference shares that could ultimately give it a significant stake in the cement firm in seven years.
The company intends to use the cash to pay down its debts and fund its expansion plans.
EAPCC has also said it is restructuring its debt to reduce the high finance costs that have hurt its margins.
Its liabilities increased by Sh2 billion in the 12 months to December 2015, which resulted in a 50 per cent increase in its financing cost to Sh279 million in the half year ended that month.
Sources within the cement manufacturer disclosed some of the options being looked at include the government taking up the Japanese Yen denominated loan, which exposes it to forex losses.
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