Par Value: 5/-
Closing Price: 37.55
Total Shares Issued: 362959275.00
Market Capitalization: 13,629,120,776
EPS: 2.89
PE: 12.993
Bamburi reports 6 months earnings through 30th June 2021 versus 30th June 2020
HY 2021 Turnover 19.628b versus 16.228b +21%
HY Total Operating Costs [18.497b] versus [16.000b]
HY Operating Profit 1.131b versus 0.228b +396%
HY Finance Costs [net] [70m] versus [133m]
HY Profit before Tax 1.109b versus 0.213b
HY Taxation [333m] versus 508m
HY Profit after Tax 0.776b versus 0.721b
HY Total comprehensive income 0.958b versus 1.054b
HY EPS 1.86 versus 1.84
HY Cash at End of the Period 6.387b versus 3.158b
Commentary
Volume recovery in domestic and export cement markets
average selling prices were better than prior year influenced by a higher proportion of sales of premium products in H1 2021
Group has absorbed significant cost inflation on imported clinker and coal
UGX has been strengthening progressively against the Kenya Shilling since 2019
Bamburi would have higher profits this year but for the taxes: @MwangoCapital
https://twitter.com/MwangoCapital/status/1430919574594232321?s=20
Conclusions
The Tax situation HY Taxation [333m] versus 508m obscured the +396% Operating Profit improvement
21% Gain in Headline Turnover was impressive.
Bamburi Cement reports FY 2020 Earnings versus FY 2019
FY Revenue 34.884b versus 36.796b
FY Total Operating Costs [33.127b] versus [35.621b]
FY Operating Profit 1.983b versus 1.117b
FY Finance Costs [net] [0.207b] versus [0.389b]
FY Profit before Tax 1.776b versus 0.728b
FY Profit after Tax 1.129b versus 0.359b
FY Other comprehensive Income 0.790b
FY EPS 2.89 versus 1,74
FY Cash and Cash Equivalents 6.251b versus 1.334b
FY Dividend 3.00 a share
Bamburi Cement Plc Audited Group Financial Results for the Year Ended 31 Dec 2020. @tradingroomke
https://twitter.com/tradingroomke/status/1384519344688975876?s=20
Conclusions
Headline Revenue down but clearly strong cost control lifted Profits.
7.79% Dividend Yield.
Not unattractive
HY results 2020
HY Turnover 16.228b versus 18.663b
HY Operating Costs [16.6b] versus [18.331b]
HY Operating Profit 228m versus 332m
HY Profit before Tax 213m versus 23m
HY Taxation 508m versus 370m
HY Profit after Tax 721m versus 393m
HY EPS 1.84 versus 1.61
No Interim Dividend
Company Commentary
Since beginning of pandemic gradual decline in activity in building and construction industry driven by construction site closures
Conclusions
This share price has crashed and burned.
Bamburi Cement Limited FY 2019 results through 31st December 2019 vs. 31st December 2018
FY Turnover 36.796b vs. 37.262b -1.251%
FY Total operating costs [35.621b] vs. [36.178b] -1.540%
FY Other gains and losses 149m vs. [208m] +171.635%
FY Impairment losses [207m] vs. [101m] +104.950%
FY Operating profit 1.117b vs. 775m +44.129%
FY Finance costs net [389m] vs. [155m] +150.968%
FY Profit before tax 728m vs. 620m +17.419%
FY Taxation [369m] vs. [48m] +668.750%
FY Profit for the year 359m vs. 572m -37.238%
FY Other comprehensive income net of tax [9m] vs. [776m] -98.840%
EPS (basic and diluted) 1.74 vs. 2.37 -26.582%
Total dividend 0.00 vs. 5.10 -100.000%
Equity attributable to owners of the company 28.703b vs. 29.576b -2.952%
Cash and cash equivalents at the end of the year 1.334b vs. 963m +38.525%
2019 RESULTS HIGHLIGHTS
Revenue
The Group Turnover at Shs 36.8bn was 1.1% behind prior year (2018: Shs 37.2bn).
The slightly lower Turnover is attributed to a comparatively adverse market situation in
2019 compared to 2018. In 2019 we were unable to access the Rwanda market through our Uganda based subsidiary Hima Cement Limited (Hima), leading to loss of volumes previously sold in Rwanda, as well as the shelving of Phase 2B of the Standard Gauge Railway (SGR) project in Kenya. The SGR project was serviced by the premium cement (CEMI 42.5) which commands a higher selling price than the ordinary (CEMII 32.5) cement. On account of the competitive pressure fuelled by overcapacity in our regional cement market, as well as the deteriorated product mix, selling prices in 2019 also declined in comparison to 2018 levels.
Operating Profit
The Group has restated its previously reported Operating Profit for the Financial Year 2018 from Shs 835m to Shs 775m by taking an additional cost accrual of Shs 60m.
The adjustment has been taken in the books of our subsidiary Hima and represents a liability that relates to Financial Year 2018, but only came to the attention of management in 2019 following a management commissioned tax health check. The restatement was as a result of failure to consider exempt sales, and restrict claimable VAT. The restatement has been done in compliance with International Accounting
Standard Number 8 (IAS 8).
The Groups Operating Profit grew by 44% over 2018 from Shs 775m (as restated) to Shs 1,117m. The operating profit growth was achieved in spite of a decline in the Kenya cement market, lower selling prices, and an impairment of Rwanda assets owing to the restricted access to the Rwanda market from Uganda. The improvement registered in the operating profit despite the highlighted downsides is testimony that the cost cutting and optimization initiative undertaken by the Group under the Building for Growth strategy launched in 2018, is bearing fruit. At operating Profit level, the benefits of cost optimisation, more than offset the adverse impact from the slight decline in topline.
Profit before Tax
Profit before tax increased to Shs 728m which is 17% higher than prior year (2018: Shs 620m). Compared to the growth in Operating Profit of 44%, the growth in profit before tax at 17% has been impacted largely by an increase in finance cost and the impairment of assets in Rwanda already referred to. The increase in finance cost by Shs 130m relates to the full year impact of interest on debt to finance the capacity expansion project commissioned by Hima in 2018.
Profit after Tax and Other Comprehensive Income
Despite growth in Operating Profit and Profit before Tax over 2018, the Group registered a 74% drop (Shs 998m) in Total Comprehensive Income which takes into account the Tax charge and net Other Comprehensive Income (OCI).
The Shs 369m tax charge in 2019 was Shs 321m higher than 2018. In 2018, both Bamburi Cement Limited (Bamburi) and Hima benefited from investment deduction
allowances after commissioning the capacity expansion projects. In 2019, only
Bamburi continued to enjoy the residual allowances as Himas was only applicable to
2018. The absence of the investment deduction allowance benefit for Hima in 2019, plus the suspension of Rwanda operations, led to a higher tax charge in 2019 due to the amortisation of the associated deferred tax asset, the disallowing for tax purposes of costs associated with the discontinuation of Rwanda operations, and the derecognition of a previously recognised deferred tax asset for Rwanda. The combined impact of these is an effective tax rate of 50.6% (2018: 7.7%). The higher tax charge in 2019 is a therefore a consequence of the non recurrent impact from investment deduction allowance benefit for Hima impacting 2018 and not 2019, and the suspension of operations in Rwanda.
OCI in 2018 was credited with Shs 1.3bn net of tax from the gain on revaluations of fixed assets. Hima undertakes a fixed asset revaluation exercise every 3 to 5 years as the circumstances may dictate. 2019 did not benefit from a similar credit.
In summary, the Group has posted a significantly improved operating profit and
underlying performance over 2018, the drop in net profit and total Comprehensive Income notwithstanding.
Cash flow
The cash flow generated from operations at Shs 3.66bn (2018: Shs 3.71bn) was flat compared to prior year. However, the Group paid lower taxes by Shs 522m in 2019 compared to 2018, thanks to the investment deduction benefit arising from the
commissioning of the capacity expansion projects by both Bamburi and Hima in 2018.
To the contrary, the net interest expense in 2019 was higher by Shs 173m manly on account of the full year impact of the cost of the debt taken by Hima to finance the
capacity expansion project.
To the contrary, the net interest expense in 2019 was higher by Shs 173m manily on account of the full year impact of the cost of the debt taken by Hima to finance the capacity expansion project. The net impact of higher interest and lower taxes paid compared to prior year, was largely the driver of the higher net cash generated from
operating activities.
The net cash used in financing activity reflects the increased final dividend in 2019.
The Groups balance sheet remains solid with a good foundation for future leveraged growth. The Groups working capital improvement initiatives taken during the year have boosted its cash position.
EXECUTION
The priority of Bamburi Cement Group has been to implement all necessary measures to protect the safety and health of all employees and their families. The outbreak, which has caused a slowdown in business operations across Uganda and Kenya, and a complete lockdown in other parts of the world, may have implications on operating results. As much as both Bamburi and Hima continue to be in operations as at the time of going to publication, it is too early to quantify the risks or full impact on financial year 2020.
Internally, and in parallel to the fore mentioned Covid 19 response measures, the Group will continue to execute Strategy 2022 agenda, focusing on Topline Growth, Cost Optimization, People agenda, Financial Strength and Sustainability. We will continue to maintain and defend our market share in an increasingly competitive environment, as well as better manage the reach and availability of our products through our Route To Market initiatives. Renewed focus will be placed on optimizing our production costs, logistics costs for both inbound and outbound transport flows, and to reduce the cost of our raw materials and cost of service to customers. While focusing on the above initiatives, the Group is hopeful that the two governments of Rwanda and Uganda will soon find an amicable resolution to the border dispute between them. The Group is optimistic that as it maximizes topline opportunities supported by transformation initiatives to reduce the cost base, it will be in a good position to create value for all its stakeholders in the medium to long term.
OUTLOOK
The East African cement markets had earlier on been projected to grow in line with growth in Gross Domestic Product (GDP), while remaining highly competitive on account of the excess capacity invested in the market. Post Covid 19 pandemic, and in line with revised projections from reputable institutions like the World Bank, the board believes that the GDP growth rate for both Kenya and Uganda will be significantly below the pre Covid 19 projection rates for 2020. Given the direct correlation between GDP growth rate and growth of the cement market, the board expects the cement market in the two countries to mirror the actual GDP growth rate in 2020.
Following the outbreak of the Corona Virus (Covid 19) in early 2020, the Board of directors of Bamburi Cement Limited, would want to assure all our stakeholders that we conduct our business in a manner that creates a healthy and safe environment for all our stakeholders our employees, contractors, communities and customers, and which is built on a sound health and safety culture. We believe in visible leadership and personal accountability at all levels throughout our organisation. We maintain a global health and safety management system designed to continuously improve our performance and actively minimise risks in our business.
DIVIDEND
The Board of Directors does not recommend payment of a dividend in 2019 (2018 Total Dividend Shs 5.10 per ordinary share, paid as Interim Dividend Shs 1.00 per ordinary share and Shs 4.10 per ordinary share as Final Dividend).
By Order of the Board,
Bamburi Cement Limited H1 2019 results through 30th June 2019 vs. 30th June 2018
H1 Turnover 18.663b vs. 18.556b +0.577%
H1 Operating costs [18.331m] vs. [17.392b] +5.399%
H1 Operating profit 332m vs. 1.164b -71.478%
H1 Other gains and losses [61m] vs. [458m] -86.681%
H1 Impairment losses on Property, Plant and Equipment [73m] vs.
H1 Finance costs net [175m] vs. 16m -1,193.750%
H1 Profit before tax 23m vs. 722m -96.814%
H1 Taxation 370m vs. [323m] +214.551%
H1 Profit for the period 393m vs. 399m -1.504%
H1 Other comprehensive income net of tax [4m] vs. [99m] -95.960%
H1 Total Comprehensive Income 389m vs. 300m +29.667%
EPS 1.61 vs. 1.47 +9.524%
Cash and cash equivalents at the end of the period 1.289b vs. 2.860b -54.930%
Equity attributable to owners of the company 28.837b
Revenue
Overall, the Groups turnover in the first half of 2019 remained flat on account of a contracted cement market in Kenya and further adversely impacted by significant drop in cement uptake by the SGR project compared to same time last year when Phase 2A was still underway. In addition, the Uganda operations were impacted by the continuing closure of the Uganda/Rwanda border, which has rendered the Rwanda market inaccessible.
Operating Profit
The first half of the year was challenging with operating profit reducing to KES 0.3 billion from KES 1.2 billion. Higher depreciation charge following the commissioning of additional capacity expansion projects in both Kenya and Uganda mid last year impacted operating profit adversely. The 2018 comparator base did not have the impact of the incremental depreciation charge. Additionally, the difficulty in accessing the Rwanda market has not only led to loss off profit margin, but also to the need to impair associated assets in Rwanda.
Operationally, 2019 has been impacted by higher energy and logistics costs fuelled by higher than prior year power tariffs and increase in fuel prices over the same period last year.
The net impact of these being that the Groups operating profit declined by 72% compared to first half of 2018.
Profit before tax declined to KES 0.2 billion from KES 0.7 billion mainly influenced by lower operating profit, increase in finance cost because of the long-term loan taken in Uganda to finance capacity expansion, and the impairment of assets in Rwanda.
Net Comprehensive income after tax
Net comprehensive income after tax at KES 0.4 billion was however higher than 2018 at KES 0.3 billion thanks to the tax benefit from the capacity expansion projects commissioned in the previous year.
As a consequence, the earnings per share grew to KES 1.61 from KES 1.47 in 2018.
Cash flow
Cash generated from operating activities at KES 1 billion was lower than same period prior year at KES 1.7 billion, mainly on account of lower operating profit. Uganda closed the first half of 2019 in a net borrowing position, while Kenya remained cash positive.
2019 OUTLOOK
In the second half of 2019, the Group profitability is expected to progressively recover due to the topline growth and cost management initiatives despite the challenging environment. However, the impact of the difficulties experienced at the Uganda/Rwanda border is a downside risk and the Group hopes this matter will be resolved swiftly.
The Group will continue to execute the Building for Growth strategic agenda, while maintaining focus on cost optimisation in order to grow profitably and competitively.
DIVIDEND
The Board of Directors does not recommend payment of an interim dividend (KES 1.00/= per ordinary share paid in 2018).
Bamburi Cement Limited FY 2018 results through 31st December 2018 vs. 31st December 2017
FY Turnover 37.262b vs. 35.974b +3.580%
FY Total operating costs [36.427b] vs. [31.745b] +14.749%
FY Operating profit 835m vs. 4.229b -80.255%
FY Finance income 103m vs. 150m -31.333%
FY Finance costs [258m] vs. [263m] -1.901%
FY Profit before tax 680m vs. 4.116b -83.479%
FY Profit for the year 614m vs. 1.973b -68.880%
EPS 2.45 vs. 4.54 -46.035%
Final dividend 4.10 vs.1.50 +173.333%
Total dividend 5.10 vs. 4.00 +27.500%
Equity attributable to owners of the company 29.711b vs. 29.372b +1.154%
Cash and cash equivalents at the end of the year 963m vs. 2.040b -52.794%
HIGHLIGHTS OF 2018 FINANCIAL YEAR
Revenue
The Groups turnover grew by 3.7% from KES 36 billion in 2017 to KES 37.2 billion in 2018. Cement volumes grow by 9%. The Group achieved this growth despite a market decline of 5% in Kenya, our biggest market, and a flat cement market in Uganda.
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.
However, the overall topline growth in a declining market is a clear indication that the execution of our Building for Growth strategy has put us on solid track to consolidate our market leadership position.
Operating Profit
The Group operating profits reduced to KES 0.8 billion in 2018 from KES 4.2 billion in the prior year. Despite the increase in turnover, there was a higher cost environment relating to higher energy costs (power, coal and petcoke), imported clinker and raw materials input prices.
Uganda was further impacted by additional provisioning mainly on receivables. The net result of all these being that operating profit in Kenya remained flat compared to 2017 and declined in Uganda.
Cash flow
Cash generated from operating activities at KES 3 billion was lower than for prior year at KES 5 billion mainly on account of lower operating profit. Uganda closed the year in a net borrowing position, while Kenya remained cash positive.
2019 OUTLOOK
In the second half of 2018, the Group completed the first phase of the capacity expansion projects in both Kenya and Uganda, at a total cost of KES 7.9 billion. These have put us in a strong position to leverage growth opportunities in our markets and to further solidify our market leadership position.
The market is expected to rebound in both Kenya and Uganda in 2019. However, the difficulties experienced at the Ugandan/Rwanda border have significantly impacted exports to Rwanda from Uganda and the Group hopes this matter is resolved expeditiously.
The Group will continue to execute Building for Growth strategic agenda, while maintaining focus on cost optimisation in order to grow profitably and competitively.
DIVIDEND
An interim dividend of KES 1.00 per ordinary share (KES 2.50 per ordinary share in 2017) amounting to KES 363 million (KES 903 million in 2017) was paid on 26 October 2018.
The Board of Directors recommends payment of a final dividend of KES 4.10 per ordinary share (KES 1.50 per ordinary share paid in 2017) subject to approval by shareholders at the Annual General Meeting. The final dividend, amounting to KES 1.49 billion (KES 544 million in 2017), when added to the interim dividend already paid, brings the total dividend for the year to KES 5.10 per ordinary share (KES 4.00 per ordinary share in 2017).
Conclusions
Went for market share in a depressed market.
Revenue +3.58% but Operating Costs +14.749% crimped profits
Dividend Pay Out is 5.10 and final is worth 3.28% of Yield.
Its a Darwinian moment in tis sector and they are sowing that they are one of the fittest in fact.
Bamburi Cement Limited H1 2018 results through 30th June 2018 vs. 30th June 2017
H1 Turnover 18.556b vs. 18.589b -0.178%
H1 Operating costs [17.392b] vs. [15.933b] +9.157%
H1 Operating profit 1.164b vs. 2.656b -56.175%
H1 Investment income 65m vs. 97m -32.990%
H1 Other gains and losses [458m] vs. [62m] -638.710%
H1 Profit before tax 722m vs. 2.663b -72.888%
H1 Profit for the period 399m vs. 1.839b -78.303%
EPS 1.47 vs. 4.39 -66.515%
Interim dividend 1.00 vs. 2.50 -60.000%
Cash and cash equivalents at the end of the period 2.860b vs. 7.405b -61.377%
Equity attributable to owners of the company 28.312b
Commentary
The first half of the year was challenging as the market in Kenya continued to contract closing 8% behind the prior year in a high external cost environment.
Uganda was negatively impacted in the first quarter by production challenges and product availability while the second quarter was negatively impacted by competitive pressure as all major Players recorded extra capacity and slowdown in government expenditure.
Uganda Audit identified a number of balance sheet write offs amounting to 315m with no cash impact.
higher power, coal and raw materials costs as well as the impact of the balance sheet write offs in Uganda.
large unrealised forex losses amount to 465m mainly on a $14m loan taken in Uganda to partly finance the capacity expansion and dollar denominated payables.
Conclusions
from a Macro cement consumption perspective -8.00%-10.00% in cement consumption year on year.
Bamburi Cement Limited FY 2017 results through 31st December 2017 vs. 31st December 2016
FY Turnover 35.974b vs. 38.281b -6.026%
FY Total operating costs [31.745b] vs. [30.286b] +4.817%
FY Operating profit 4.229b vs. 7.995b -47.104%
FY Investment income 150m vs. 369m -59.350%
FY Finance costs [263m] vs. [93m] +182.796%
FY Profit before tax 4.116b vs. 8.271b -50.236%
FY Profit for the year 1.973b vs. 5.890b -66.503%
EPS 4.54 vs. 14.44 -68.560%
Final dividend 1.50 vs. 6.00 -75.000%
Total dividend 4.00 vs. 12.00 -66.667%
Equity attributable to owners of the company 29.372b vs. 26.405b +11.237%
Cash and cash equivalents at the end of the year 2.040b vs. 6.972b -70.740%
Company Commentary
Turnover decreased by 2b. following lower sales in Kenya due to contracted market
Uganda sales were broadly flat in both domestic and export markets
Operating Profit reduced from 8b to 4.2b due to lower revenues and higher energy prices
1.8m tons cement capacity expansion in Kenya and Uganda is on course.
Final Dividend 1.50 + 2.50 4.00.
Conclusions
H1 Turnover 17.535b vs. 19.111b -8.247%
H1 Operating costs [14.879b] vs. [14.962b] -0.555%
H1 Operating profit 2.656b vs. 4.149b -35.985%
H1 Investment income 97m vs. 218m -55.505%
H1 Finance costs [28m] vs. [18m] +55.556%
H1 Profit before tax 2.672b vs. 4.272b -37.453%
H1 Profit for the period 1.848b vs. 2.899b -36.254%
EPS 4.39 vs. 7.15 -38.601%
Cash and cash equivalents at the end of the period 7.405b vs. 10.456b -29.179%
Interim dividend 2.50 vs. 6.00 -58.833%
Company Commentary
The business in Kenya experienced a difficult business environment characterised by a contracting market, low private sector investment resulting in slump in construction activity especially in the individual home builder segment, delays in some infrastructure projects, and drought conditions. In contrast, the business in Uganda enjoyed good market conditions in both domestic and export markets with Hima recording good performance.
Operating Profit reduced from 4.1b to 2.7b due to lower revenues, higher coal prices driven by increased world coal prices and higher power costs following drought conditions in Kenya.
Profit before Tax declined to 2.7b from 4.3b due to lower operating profit, impact of lower cash deposits at lower interest rates and lower foreign exchange gains.
Cash decreased to 7.4b due to payments for the capacity expansion in both Kenya and Uganda together with lower cash from operations.
phase 1 of the capacity expansion project in both Kenya and Uganda tat will see the Group's cement grinding capacity increase by 1.8m tons is on course commissioning of both projects scheduled for mid 2018
Interim Dividend 2.50 versus 6.00
Conclusions
Poor H1 see above Company Commentary.
FY Turnover 38.034b vs. 39.200b -2.974%
FY Cost of sales [24.790b] vs. [26.670b] -7.049%
FY Gross profit 13.244b vs. 12.530b +5.698%
FY Operating expenses [5.375b] vs. [5.251b] +2.361%
FY Operating profit 7.869b vs. 7.279b +8.106%
FY Investment income 369m vs. 374m -1.337%
FY Profit before tax 8.271b vs. 8.458b -2.211%
FY Profit for the year 5.890b vs. 5.872b +0.307%
EPS 14.44 vs. 14.49 -0.345%
Total assets 33.765b vs. 34.337b -1.666%
Cash and cash equivalents at the end of the year 6.972b vs. 8.453b -17.520%
Final dividend 6.00/ share [worth 4.09% of yield]
Interim dividend 6.00/share
Company Commentary
Operating profit +8% versus 2015
competitive operating environment a marginal reduction in volumes into inland Africa export markets and intense competition particularly in the individual home builder segment impacting prices in some markets higher volumes in the infrastructure and contractor segment in the key markets of Kenya, Uganda and Rwanda.
cost management measures a tight focus on energy costs and plant efficiency Projects in Kenya and Uganda despite higher inventory provisions
Conclusions
Fairly valued with a mouth watering dividend yield of 8.2%
The largest cement manufacturing company in the region.
H1 Turnover 19.111b vs. 19.321b -1.087%
H1 Operating costs [14.962b] vs. [15.289b] -2.139%
H1 Operating profits 4.149b vs. 4.032b +2.902%
H1 Investment income 218m vs. 154m +45.558%
H1 Profit before tax 4.272b vs. 4.502b -5.109%
H1 Profit for the period 2.899b vs. 3.083b -5.968%
EPS 7.15 vs. 7.77 -7.97%
Equity attributable to owners of the company 26.597b vs. 26.889b -1.086%
Cash and cash equivalents at the end of the period 10.456b vs. 11.443b -8.625%
Company Commentary
H1 Turnover was 19.1b versus 19.3b following a slow growth in the individual home builder segment in Kenya lagging construction activity together with slightly reduced volumes into INLAND Africa export markets.
Turnover was positively impacted by vibrant infrastructure and contractor segments across the region
The Group has approved Phase 1 of a capacity expansion Project on both Kenya and Uganda, which will increase cement capacity by 1.7mt at a cost of 8.3b
Interim Dividend 6 a share
Conclusions
Aggressive Capacity Expansion Plan
FY Turnover 39.200b vs. 36.029b +8.801%
FY Cost of sales [26.670b] vs. [26.683b] -0.047%
FY Gross profit 12.530b vs. 9.346b +34.068%
FY Operating expenses [5.251b] vs. [4.071b] +28.986%
FY Operating profit 7.279b vs. 5.275b +37.991%
FY Profit before tax 8.458b vs. 5.801b +45.802%
FY Profit for the year 5.872b vs. 3.903b +50.448%
EPS 14.49 vs. 9.80 +47.857%
Total assets 34.337b vs. 34.082b +0.748%
Net increase in cash and cash equivalents 0.854b vs. [1.212b] +170.462%
Dividend per share 13.00 vs. 12.00 +8.33%
Company Commentary
market conditions were more favourable compared to 2014 with stable macro conditions for most of the year
Group Turnover increased +9.00% driven by increased demand in the key domestic markets in Kenya and Uganda
growth in the inland Africa exports out of Uganda earlier in the year
Operating Profit increased by +38% to 7.3b
Investment Income and foreign exchange gains increased PBT +46%
cash generated from operations increased to 8.3b from 7.6b
Group is optimistic about GDP growth in 2016
Interim Dividend 6 Final of 7
Conclusions
Muscular bulked up FY Earnings and looks like it can be maintained at this New Trajectory in 2016
H1 Turnover 19.321b vs. 17.290b +11.7%
H1 Operating profit 4.032b vs. 2.209b +82.5%
H1 Investment income 154m vs. 206m -25.2%
H1 Profit before tax 4.502b vs. 2.325b +93.6%
H1 Profit after tax 3.083b vs. 1.658b +85.9%
H1 Earnings per share 7.77 vs. 4.38 +77.4%
Cash and bank balances 11.443b vs. 7.644b +49.7%
Interim dividend 6.00
Company Commentary
Group Turnover increased to 19.3b as a result of improved market conditions in both Kenya and Uganda
strong inland Africa export markets
Operating profit due to growth in sales better external cost environment progressive cost initiatives
investment income and large foreign exchange gains on dollar denominated liquid assets
Conclusions
Really strong results. confirms why Bamburi is +10% YTD.
It would be interesting to know more about dollar denominated liquid assets
Full Year Results through 31st December 2014 versus through 31st December 2013
Full Year Turnover 36.029b versus 33.928b +5.831%
Full Year cost of Sales [26.683b] versus [25.411b]
Full Year Gross Profit 9.346b versus 8.517b
Full Year Other Operating costs [4.071b] versus [3.275b] +24.305%
Full Year Investment Income 349m versus 473m
Full Year other gains and Losses 253m [78m]
Full Year Finance Costs [76m] versus [121m]
Full Year Profit before Tax 5.801b versus 5.516b +5.166%
Full Year Profit after Tax 3.903b versus 3.673b +6.26%
Full Year Earnings Per Share 9.80 versus 9.55 +2.617%
Net Cash at end of year 7.644b versus 8.876b
Final Dividend 6 shillings [+6 shilling Interim]
Company Commentary
Turnover increase mainly as a result of improved market conditions in Uganda, growth in the Kenyan market, in particular in the Infrastructure segment in the latter part of the year
Exports into inland Africa with the exception of South Sudan
Group is optimistic
Conclusions
Better than expected results given the First Half Release and snapping a Sequence of 3 years of declining Profits
6 months through June 2014 versus 6 months through June 2013
H1 Turnover 17.290b versus 15.841b +9.00%
H1 Operating profit 2.209b versus 3.051b -27.597%
H1 Investment Income 206m versus 267m
H1 Profit Before Tax 2.325b versus 3.270b -28.89%
H1 Profit After Tax 1.658b versus 2.305b -28.06%
H1 Earnings Per share 4.38 versus 6.00 -27.00%
Net increase in cash and cash equivalents 1.505b versus [1.246b]
Cash at End of Year 10.381b versus 7.523b
6 shillings a share Interim Dividend
Company Commentary
Group turnover for the period under review grew by 9% as a result of stronger first half sales in both the domestic markets and inland Africa exports markets.
Margins in Uganda remained lower than in the first half of 2013.
Higher costs 25% increase in power prices in Kenya
Use of more imported clinker and introduction of a mining levy in Kenya led to a 29% reduction in operating Profit and Pre Tax Profit
Conclusions
The Turnover increase was a bright spot but there has been significant margin erosion.
Paying out 136.9% of the EPS as an Interim Dividend as a 60 year celebratory present to Shareholders is an interesting move.
I think the Macro Backdrop for Cement is constructive.
Full Year Results through 31st December 2013 versus through 31st December 2012
Full Year Turnover 33.928b versus 37.491b -9.503%
FY Operating Costs [28.686b] versus [30.650b] -6.407%
Operating Profit 5.242b versus 6.841b -23.373%
Full Year Profit before Tax 5.516b versus 7.176b -23.13%
Full Year Profit after Tax 3.673b versus 4.882b -24.764%
Full Year Earnings Per share 9.55 versus 12.17 -21.52%
Interim Dividend 2 Final Dividend 9 a share 11.00 versus 10.50 +4.76%
Note that they have paid out as Dividend 115.18% of Full Year Earnings Per Share.
Company Commentary
Commenting on the Companys results the Managing Director Mr Hussein Mansi said, In the first half of 2013, we experienced a drop in the Companys performance mainly attributable to competitive pressure in Uganda and we also saw a significant reduction of exports out of Uganda to the inland Africa markets due to political tensions, which impacted our overall performance.
In Kenya, the Company retained a strong position, which rebounded in the second half of 2013 notwithstanding a contracted market in the first half of the year. There was also a notable slowdown in the infrastructure segment, where the Company is strongly positioned, due to delayed payments to contractors on major projects.
Bamburi Cement Group expects 2014 to be a better year with easing political tensions in major Inland Africa markets out of Uganda, as well as an improved business environment in Kenya which the Company has already started witnessing.
The Group is also keen on identifying capacity increase opportunities in Kenya and Uganda in line with Lafarges announcement of 10 million ton expansion in Sub Saharan Africa.
In Uganda, the Company expects improved plant efficiencies to result in lower power consumption, to mitigate against rising power tariffs. We invested KES. 467 Million in a new Pet coke mill in Uganda and increased alternative fuel substitution in both Kenya and Uganda, which will realize a reduction in energy costs in 2014 as these measures gain momentum.
The company is also optimistic that a better power generation mix expected in Kenya in the 2nd half of 2014 may further ease power costs. On the environment front, the successful commissioning of a KES 275 Million new bag filter in Uganda, goes a long way to a sustained commitment to compliance to Global environmental standards, explained Eric Kironde the Companys Finance Director.
The Company paid an interim dividend of KShs. 2.00/= per ordinary share amounting to KES. 726 Million on 15th October 2013.
The Board of Directors recommends payment of a final dividend of KES. 9.00 per ordinary share (KES. 8.50 per ordinary share paid in 2012) subject to approval by shareholders at the Annual General Meeting. The final dividend, when added to the interim dividend already paid, brings the total dividend for the year to KShs. 3,993 Million (KES. 3,812 Million in 2012).
Conclusions
Bamburi Cement Earnings have been on a declining Trend for the last 24 months. Note they have paid out 115.18% of FY Earnings Per Share as Dividend.
I expect Earnings to improve from here and snap the 24 month decline.
The Final Dividend is worth 4.36% of yield but on a PE of 21.57 I think we should a correction from this level of 206.00, near term.
H1 Earnings through June 2013 versus June 2012
H1 Turnover 15.841b versus 19.201b -18.00%
H1 Operating Profit 3.051b versus 3.550b -14%
Investment Income 267m versus 432m
H1 PBT 3.270b versus 3.712b -11.9073%
H1 PAT 2.305b versus 2.568b -10.241%
H1 EPS 6.00 versus 6.38
Company Commentary
The Decline in Turnover a result of General Market Slowdown in the first Quarter and low inland Africa exports
Kenya Market experienced a slowdown due to uncertainty during the Elections Period
Groups attractive central Africa export markets were adversely affected
Cites an improvement in Operating Margins
strongly optimistic of a stronger second half
Interim Dividend 2 shillings a share unchanged
Conclusions
H1 Turnover Decline of 18% is noteworthy.
FY Earnings through December 2012 versus FY through December 2011
FY Turnover 37.491b versus 35.884b +4.4783%
Operating Costs 30.650b versus 27.930b +9.7386%
Operating Profit 6.841b versus 7.954b -16.296%
Investment Income 657m versus 342m
Finance Costs [251m] versus [374m]
FY PBT 7.176b versus 8.466b -15.237%
FY PAT 4.882b versus 5.859b -16.675%
FY EPS 12.17 versus 14.44 -15.72%
Total Comprehensive Income 10.712b versus 5.815b
Gain on Revaluation of Property Plant and Equipment 7.259b
Final Dividend 8.50 per share [+2.00 Interim]
Company Commentary
Cites Growth in Exports into Inland Africa out of Uganda
Growth in Domestic Sales in Kenya despite increased Competition
There was a Decline in growth of export of exports sales into Inland Markets in the 2nd Half of the Year due to Political Instability
Removal of power Subsidies in Uganda
Reliance on Imported Clinker in Kenya
Expecting Efficiency Gains from completed Bag Filter Project in Mombasa Plant
Conclusions
On a PE of 16.7625 Bamburi is not cheap.
Final Dividend worth 4.1666% of Yield.
H1 2012 Earnings versus H1 2011 Earnings here
Turnover 19.201b versus 16.421b +16.929%
Operating Profit 3.55b versus 3.92b -10.204%
Profit Before Tax 3.712b versus 4.26b -12.863%
Profit After Tax 2.568b versus 2.970b -13.535%
Earnings Per Share 6.38 versus 7.65 -16.601%
Net Foreign Exchange Gains or Losses -150m versus +0.5b
Interim Dividend 2 shillings a share
Company Commentary
Domestic and Export Sales to Inland Africa Markets +5.4% and +32.2% respectively
Citing Volatility of Fuel Prices over the Reporting Period.
Group remains strongly optimistic
Conclusions
The Group remains strongly optimistic. This Reporting Period witnessed a very Volatile and essentially elevated Fuel Price which has crimped Earnings. However, Volume Expansion is muscular.
FY Results 2011 versus FY Results 2010
Turnover 35.884b versus 28.075b
Profit Before Tax 8.466b versus 7.564b
PAT 5.859 versus 5.299b +10.568%
EPS 14.44 versus 14.02 +2.995%
Interim 2.0
Final Dividend 8.00
While early positive signs are starting to develop in the United States economy, sovereign debt concerns in the Eurozone, political instability in the Middle East, cost inflation in developing markets, and uncertain political environment in Kenya continue to make visibility difficult, it said in a statement.
6 Months to June 2011 versus 6 months to June 2010
Swot Analysis 6 months to June 2011 versus 6 months to June 2010
Turnover 16.421b versus 13.045b +26%
PBT 4.260b versus 3.504b
EPS 7.65 versus 6.52
Interim Dividend 0.80 per share
Company Commentary
Citing strong Growth Domestic Sales Uganda
Fixed Operating Costs reduced by 9%
Exchange Gains on Deposits
Conclusions
Strong Results I thought
The largest cement manufacturing company in the region.
1.5b from ARM share sale
FY Dec 2010 versus FY Dec 2009 compared
Turnover 28.075b versus 29.994b
PBT 7.564b versus 9.596b -21.175%
Profit for the Year 5.299b versus 6.970b
Exchange Losses 654m
EPS 14.02 versus 18.32
Commentary
Increased Competition across all Markets
Citing Higher Power Prices
One Off Gain of 1.2b from 2009 Sale of ARM shareholding not repeated
Final Dividend 7.00
Total Dividend 8.50
Conclusions
The Previous FY was flattered by a 1.2b shilling One off Gain from the sale of ARM shares. If You strip that Number out the Year on YearComparison does not look as brutal as it might on first look. |
