Bamburi Cement net profit for the year ended December 2022 has dropped by 86.9 percent to Sh181 million on the back of reduced sales and increased costs.
The Nairobi Securities Exchange-listed firm’s net earnings retreated from Sh1.38 billion posted in the previous year as sales dropped by six percent to Sh38.99 billion.
Total operating costs stood at Sh38 billion from Sh39.2 billion, nearly matching the sales for the period.
Bamburi said the slowdown in economic growth cut cement sales while the heightened inflationary pressures increased power, fuel, transport and raw materials costs.
“The soaring inflation impacted building materials cost, thereby adversely impacting cement demand. The conflict in Eastern Europe impacted global supply chains, consequently leading to significant increase in sea freight and cost of raw materials,” said the firm.
Net finance costs nearly doubled from Sh143 million to Sh224 million to pile pressure on the net earnings.
The board is proposing to pay a dividend of Sh0.75 per ordinary share, amounting to Sh272 million, marking a 79 percent cut from the Sh3.75 per share or a total of Sh1.3 billion paid out in 2021.
Bamburi had in November issued a profit warning to prepare investors for a more than 25 percent profit plunge in line with the Capital Markets Authority rules.
Despite inflation remaining above the government’s target range of 2.5 percent and 7.5 percent and supply chains still facing disruptions, the board is eying a turnaround in performance this year.
“We are cognisant of the current challenging operating environment. However, we remain steadfast in our efforts to drive positive performance in 2023,” said the firm.
Last month, Bamburi Cement appointed Mohit Kapoor as the new CEO, following the exit of Seddiq Hassani after five years at the firm’s helm.