Bamburi dividend up to Sh1.85bn despite record low profits - Daily Nation

Bamburi dividend up to Sh1.85bn despite record low profits

Monday April 15 2019

Bamburi Cement plant in Mombasa

Bamburi Cement plant in Mombasa. FILE PHOTO | NMG 

By PATRICK ALUSHULA
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Bamburi Cement #ticker:BAMB shareholders are set for 27.5 percent rise in dividend to Sh1.85 billion despite profits tumbling to the lowest level in over 15 years.

The cement maker, which had issued profit warning, announced a 68.8 percent decline in net profits to Sh614 million for the year ended December 2018 from Sh1.97 billion earned in the previous year.

“Increased competitive pressure fuelled by a growing gap between installed cement grinding capacity and the shrinking market has played a key role in market dynamics,” said the board in a statement.

This marks second year in a row for profits to decline. In the year ended December 2017, the cement-maker’s profits tumbled by 67 percent to Sh1.97 billion.

The group’s turnover grew by 3.7 percent to Sh37.2 billion despite a five percent decline in Kenyan market and a flat cement market in Uganda. Operating costs jumped 14.7 percent to Sh36.4 billion, piling pressure on the bottom-line.

Despite the historic low profits, the board has increased total dividend per share to Sh5.1, up from Sh4 paid in the previous financial year. This represents 27.5 percent rise.

“The board of directors recommends payment of final dividend of Sh4.1 per ordinary share compared to Sh1.5 per ordinary share paid in 2017, subject to approval by shareholders,” said the board chaired by John Simba.

The final dividend, valued at Sh1.49 billion, adds to Sh1 per share interim dividend amounting to Sh363 million that was paid in October last year. This brings total payout to Sh1.85 billion.

The board is projecting a better 2019, having completed the first phase of the capacity expansion projects in Kenya and Uganda at Sh7.9 billion. It says the additional capacity will present new opportunities.