Bamburi Cement Group has weathered the Covid-19 pandemic and posted a 144 per cent increase in pre-tax profits over the Ksh.728 million realised in 2019.
In a statement, Bamburi Cement Group Chairman Dr John Simba, said that the Group’s results for year 2020 demonstrates the great resilience of their business.
“ We are proud of our team’s agility to weather the storm, effectively driving cost savings ahead of revenue decline, improving net working capital and delivering a record high Cashflow,” he said.
According to the Group, the results defied a topline decline of 5 per cent and the effects of the Covid-19 pandemic.
The statement stated that the Board of Bamburi Cement Limited has recommended the payment of a dividend of Ksh.1,089 million, a contrast to year 2019 when no dividend was declared.
“In consideration of the strong performance delivered and in recognition that year 2020 was a difficult one financially for many, our esteemed shareholders included, the Board of Bamburi Cement Limited, recommends the payment of a final dividend of Ksh.3.00 per share,” Simba said.
Seddiq Hassani, Bamburi Cement Group MD said that their profitability despite the adverse economic impact of Covid-19 pandemic, goes a long way to show the resilience of their employees, great teamwork, and the strong foundation set by their company culture and long-term business strategy.
“I take extreme pride in sharing these results with all our employees who delivered them,” he said.
According to the company, the containment measures involving curfews, lockdowns and restriction of movement for goods and people across borders in the first half of 2020 caused the Group topline to decline by 13 per cent.
The attributed the decline in topline to adverse impact of stringent Covid-19 containment measures announced by both governments, Kenya and Uganda, at the onset of the pandemic in March 2020.
However, the company said it registered a recovery in the second half of 2020, thanks to the easing off of the containment measures.
The growth in the pre-tax profit is said to have been driven by a significant 77.5 per cent growth in operating profit in 2020 to Ksh.1,983 million (2019: Ksh.1,117 million).
47 per cent reduction in net finance costs to Ksh.207 million from Ksh.369 million in 2019, is said to have further contributed to the growth in pre-tax profit.
Additionally, the Group attributed its performance to the launch and implementation of the Health, Cost and Cash (HCC) agenda adopted at the onset of the Covid-19 pandemic to build resilience in, and crisis-proof the business.
In the execution of the HCC agenda, the company said the three pillars Health preservation, Cost Optimisation and Cash protection were prioritized as key business deliverables during the pandemic crisis.
“Cost optimization throughout the company, coupled with significant turnaround of the Uganda subsidiary after a depressed 2019 performance, attributed to the closure of the Uganda-Rwanda border, cushioned the Group’s bottom-line from impact of the topline decline to Ksh.34,884 million in 2020 (2019: Ksh.36,796 million),” read the statement.
“Thanks to the ‘Cash’ pillar of the HCC agenda, the Group generated record Cashflow of Ksh. 4,856 million (2019: Ksh. 359 million).”
Through the Health pillar of HCC, the Group is reported to have implemented a variety of measures to protect the health of its employees and partners, including strict protocols across all its operating sites, having non-operational staff work from home, and providing staff with Covid-19 care packs.
It said that it was also visibly involved in the collective drive to help alleviate the impact of the Covid-19 pandemic, committing Ksh. 15.6 million and UGX 456.5 million to support the fight against the spread of the virus in both Kenya and Uganda respectively.
In Kenya, the Ksh.15.6 million includes Ksh.5 million which was donated directly to the government-sponsored Covid-19 Emergency Fund kitty.
The balance is reported to have gone towards donation of Personal Protective Equipment (PPE) to healthcare workers in various county hospitals; supporting communities in Machakos, Kajiado, Mombasa, Kilifi and Kwale counties with water tanks, face masks, sanitizers and other Covid-19 defensive initiatives.
“In Uganda, through Bamburi’s subsidiary Hima Cement Limited, donations of sanitisers, soap and PPEs were made to communities in Kasese, Kapchorwa and Tororo,” it stated.
Further, Hima Cement is reported to have donated mattresses for a Covid-19 ward in Tororo Hospital in Eastern Uganda; cement towards the construction of driver shelters at border crossing points and availed its ambulance to the Covid-19 District Task Force at Kasese to serve Covid-19 emergency needs.
Hassani expressed optimism on the 2021 Outlook strategic priorities for the business and its partners which are clearly defined and their successful execution will prove critical against the current operating background especially with the emergence of a new Covid-19 wave that has necessitated partial re-introduction of containment measures.
“I am optimistic that we have established a solid foundation from which we will continue to execute our strategic priorities in 2021. I have confidence in the ability of the two governments of Kenya and Uganda to help contain the pandemic and promote a positive economic environment supportive of business growth,” he said.