Cement sales boost ARM's profit by 8pc to Sh1.25bn
An employee of Athi River Mining company feeds bags into the plant at Athi River last year. The company’s stock closed trade at an average price of Sh59 Monday. Photo/File
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The company’s net profit grew from Sh1.15 billion in 2011 to Sh1.25 billion in 2012, while group turnover rose by 39 per cent from Sh8.2 billion to Sh11.4 billion.
ARM Cement Limited registered an eight per cent rise in net profits in the year 2012 as it recorded a growth in cement sales in Kenya, Rwanda and Tanzania.
The company’s net profit grew from Sh1.15 billion in 2011 to Sh1.25 billion in 2012, while group turnover rose by 39 per cent from Sh8.2 billion to Sh11.4 billion.
In a statement released Wednesday, the company announced that it would issue a dividend of 50 cents, which is 25 per cent higher than the 2011 dividend of 40 cents. The total dividend paid for the year was Sh198.1 million, compared with Sh173.3 million in 2011.
The earnings per share rose from Sh2.32 in 2011 to Sh2.51 per share in 2012.
The cement maker in December affected a share split that saw its number of issued shares rise from 99.05 million to 495.275 million shares.
“Cement sales increased by 64 per cent from the increased market share in Kenya and Rwanda, and the contribution of three months sales from the Dar es Salaam plant which became operational in October 2012,” said the company in a statement.
The cash generated from operations rose by almost Sh496 million from Sh2.172 billion in 2011 to Sh2.668 in 2012 as the company expanded operations in the East Africa region.
In the nine months to September 2012, the company had reported a four-fold growth in profits compared to the same period in 2011, on the back of higher sales and foreign exchange gains.
Net debt for the year increased to Sh1.96 billion, after the company got a $50 million (Sh4.2 billion) loan from Nigeria-based Africa Finance Corporation in September 2012 with the option to convert the debt into a stake equivalent to 13.6 per cent of the cement firm within six years.
The funds, says ARM, were used to complete the funding requirements for a clinker plant in Tanga, Tanzania.
Interest payments consequently went up to Sh793.5 million, up by Sh348.6 million from the amount paid in 2011.
The group forecasts strong performance in 2013 based on the strong growth in turnover in the first two months of the year when compared to the same period in 2012.
“The group expects to register another year of strong growth and improved profitability on the back of new capacity in Tanzania, and increased capacity utilisation and efficiency in operations in Kenya,” said the company.
