Bamburi Cement declared a significant dividend of KES 5.50 per share for FY2023, a remarkable increase of 687.5% compared to the previous year’s proposed dividend of KES 0.75 per share. This translated to a significant jump in the dividend growth rate, reaching 11.7% in FY2023 compared to just 2.7% in FY2022.
The sharp increase in the dividend was due to the positive proceeds from the sale of Bamburi’s Ugandan subsidiary, Hima Cement. This one-off event provided the company with new resources, which they opted to share with shareholders through higher dividends.
The company recorded healthy growth in service sales, reaching KES 22 billion in FY2023, up from KES 20.7 billion in FY2022 (a year-on-year increase of 6.3%). This was due to continued demand for Bamburi’s cement products across the East African region.
While sales figures offered a bright spot, Bamburi also faced challenges on the cost side. This positive trend was offset by an increase in total operating expenses (3.5%) from increased investments and operating costs.
Despite the cost pressures, bamburi cement mombasa did demonstrate progress in managing production costs. Operating profit increased from KES 0.7 billion in FY2022 to KES 1 billion in FY2023, representing a growth of 42.9%.
However, overall profitability remained a challenge. Profit before tax reached KES 1.1 billion in FY2023, compared to KES 0.7 billion in FY2022. It’s important to note that a significant loss from discontinued operations in FY2023, amounting to KES 1.1 billion, largely contributed to this increase.
Additionally, profit after tax increased, from Ksh 267.7million in FY2022 to Ksh 672 million in FY2023.
Notably in 2021, Bamburi Cement recorded the lowest profit after tax in 7 years due to lower sales, higher costs, and a larger-than-normal tax bill.
The company paid Sh454 million in taxes in 2021, but its pre-tax earnings were Sh635 million, resulting in an effective tax rate of 71.4 percent. The standard corporate income tax rate for resident firms is 30 percent, which is closer to what Bamburi paid in 2021.
Other factors that contributed to the decline in profit include a slowdown in market demand for cement and high energy costs. Increased raw material costs due to the global disruption of the supply chain also played a role.
Additionally, there was a significant inflation of fuel prices, logistics costs, and imported clinker prices in both Kenya and Uganda, as well as forex losses of the Kenya Shilling and Uganda Shilling against other major currencies.
The bamburi cement price per bag varies according to the cement type. Bamburi Fundi cement is priced at Sh710 per bag, Bamburi Tembo cement at Sh755 per bag, Bamburi Nguvu cement at Sh760 per bag, and Bamburi Powermax cement at Sh1,100 per bag.
The bamburi cement owner is Lafarge Group, and they are headquartered in Nairobi. The bamburi cement products include a variety of precast mould concrete for different applications ranging from block drainage, hollow blocks, road kerbs, edge restraints to fencing products among others.
As of today, April 23, 2024, the bamburi cement share price is at KES 46.75. For inquiries, reach out through the bamburi cement contacts at + 254 709 724000.
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