Lafarge Bamburi Group 2010 Full Year Results

10.03.2011
 

 

 

 

 

Press Release:

 

Lafarge Bamburi Group posts 7.3 billion in Operating Profit

 

The Group delivers strong results in the second half. Our investments will sustain profitability momentum into the future.

 

The Board of Directors of Bamburi Cement Ltd, chaired by Richard Kemoli, met on 25th February 2011 to approve the audited results for the year ended 31 December 2010.

 

Second Half Key Figures:

 

- Turnover: Up 9% to KShs 15 billion

- Operating profit: Up 14% to KShs. 4 billion

- Earnings Per Share: KShs. 7.50

 

Full Year Key figures vs. prior year:

 

- Turnover: KShs 28 billion

- Operating profit: KShs. 7.3 billion

- Last year‟s divestment gain from ARM KShs 1.2 billion

- Cash & Cash equivalents: KShs 7.6 billion

- Earnings Per Share: KShs. 14.02

 

Results Highlights:


- The Group demonstrated strong resilience in the second half in the face of new capacities by competition across all markets.
- The Group significantly strengthened its market position across its traditional East African markets on the back of its new capacity investments in Uganda.
- Full year operating profit impacted by lower turnover and higher power prices in the first quarter of the year.
- Strong recovery in the second half of the year in operating profit spurred by improved efficiencies from the new production line in Uganda and major steps on cost reduction efforts.
- The fixed operating expenses dropped by 8%, notwithstanding inflationary pressures.
- The improvements in the distribution system implemented in March 2009, resulted in lower distribution costs compared to prior year

Profit before tax and exceptional items dropped by 7.4%. The exceptional items in 2009 were the major one-off divestment gain from Athi River Mining of KShs. 1.2 billion and receipt of KShs. 218 million from the insurers in respect of the Mombasa Plant fire incident of 2007.
- The Group refinanced its US dollar denominated loan from the ultimate holding company by a local currency loan to mitigate hard currency exposure in Uganda
- The Group maintained a strong cash and liquidity position

 

2011 Outlook:

 

The Board of directors takes cognisance of increased competitive environment and continues to implement appropriate strategies to enhance the Group‟s growth and profitability. The new production line at Kasese Plant, Uganda will go a long way in enhancing the Group‟s efficiency levels and improve operating results. The Group will focus on maintaining a superior offer to the market through, inter alia, innovation and first-rate customer service. Further, the Group will increase its efficiency by stringent cost management and rationalization of capital expenditure while remaining cognisant of its safety and health obligations and environmental stewardship responsibilities.

 

To steer through the anticipated challenges, the Group will leverage on the ongoing commercial initiatives to drive sales and grow its market share, improve industrial productivity to meet customer expectations and sustain the cash generation initiatives.

 

Capacity enhancement:

 

In October 2010, the group successfully commissioned its fully integrated state of the art cement plant at Kasese, Uganda. The plant which was officially inaugurated by the president of the Republic of Uganda, H.E.Yoweri Museveni on 7th January 2011, increased the annual cement output capacity by an additional 500,000 tonnes. The $120 million plant is also expected to increase efficiency and profitability in the future.

 

In pursuant of the market leadership agenda and to maintain its position in the ready mix concrete and precast segment, the group invested in additional truck mixers and commissioned two ultra modern block making machines in Nairobi and is in progress of finalizing the Mombasa set up.

 

Safety, Health and Environment:

 

The group continues to raise the bar on safety performance. During the year, the group performed exceptionally well by recording zero industrial and road fatalities for both employees and contractors. For this achievement, Bamburi Cement has joined the Lafarge Groups‟ prestigious Health and Safety Excellence Club demonstrating the companies‟ world class performance in this area.

 

These achievements were realized on the back of higher industrial activities driven by the commissioning of the new plant in Uganda and the expansion of the ready mix concrete and precast units in Kenya. Furthermore, as part of our continued focus on road safety management practices, the group rolled out the „Mchukuzi' Awards in June 2010 and subsequently „Know your driver' campaign in December 2010 to enhance safety partnering with contracted transport operators.

 

 

For more information contact:

 

Emily Waita

Corporate Communications Manager

020 289 3000

emily.waita@bamburi.lafarge.com