Listed cement maker, Bamburi saw a 15 per cent dip in its pre-tax profits to Sh7.17billion from Sh8.45 billion last year. The drop was attributed to lower exchange gains on foreign currency cash balances.
Its operating profits also dropped by 14 per cent to Sh6.84 billion from Sh7.95 billion due to an increase in the cost of sales by 7 per cent.
The Lafarge controlled firm said the operating environment was tough in 2012 with high inflation and removal of power subsidies in Uganda which resulted to a 70 per cent power cost increase.
It also spent more money due to reliance on imported clinker in Kenya, before it commissioned its bag filter project in the last quatre of 2012.
The group however posted a 4 per cent growth in turnover to Sh37.5 billion following growth in exports in to inland Africa out of Uganda in the first half of the year.
There was also a growth in domestic sales in Kenya despite increased competition."There was however a decline in growth of export sales into inland African markets in the second half of the year due to political instability in those markets," said Hussein Mansi, Bamburi managing director in a statement.
The Group anticipates the demand to continue growing in the region, despite a slow start in Kenya influenced by the election period. "The regional demand growth will also be supported by improved political stability in the inland Africa export markets. The Group remains well positioned to take advantage of such growth opportunities while protecting share of the market," Mansi said.
Bamburi is expecting to take full advantage of the completed bag filter plant in Mombasa.Mansi said it plans to significantly reduce on use of imported clinker and continue on the cost containment actions and optimising working capital.
One of its competitors,East African Portland Cement Company, last week announced a 253 per cent rise in profits recording Sh377 million profit before tax for the six months ending December 31, 2012, up from a loss of Sh247 million the same period last year. this was attributed to cost-cutting, cost-management and forex gains. Bamburi declared a dividend payout of Sh726 million, issuing Sh2 per share.