Baloobhai Patel-linked Bamburi Cement sees profit dip below $2 million

Bamburi Cement, a leading cement company owned in part by Kenyan industrialist Baloobhai Patel, saw a significant drop in earnings at the end of its fiscal year 2022, owing to difficulties in its operating environment, which had a significant impact on both revenue and earnings during the period under review.

According to its recently published financial results, its profits at the end of its 2022 fiscal year fell by 86.9 percent from Ksh1.38 billion ($10.14 million) in 2021 to Ksh181 million ($1.33 million) in 2022, owing to a 6 percent drop in revenue from Ksh41.5 billion ($305.07 million) to Ksh38.99 billion ($286.6 million).

The drop in earnings comes after the company issued a profit warning in November to prepare investors for a more than 25 percent drop in profits in accordance with Capital Markets Authority rules.

During the review period, the group’s profit decline can be attributed to two factors, namely, the significant decrease in revenue and the notable increase in total operating costs. The operating costs rose from Ksh38 billion ($279.34 million) to Ksh39.2 billion ($288.16 million), which nearly equaled the period’s sales, resulting in a significant impact on earnings.

Furthermore, the group’s net finance cost increased by almost triple-digit percent, from Ksh143 million ($1.05 million) to Ksh224 million ($1.64 million), exerting further downward pressure on the group’s earnings.

The Patel-linked firm disclosed in its financial statement that the group’s declining earnings were impacted by the soaring inflation that led to higher building materials costs, decreased cement demand, and ultimately, reduced revenue and earnings.

Bamburi Cement Limited is the foremost cement company in East Africa, renowned for providing innovative construction solutions and driving long-term growth in its operations.

Its Mombasa cement plant is one of the largest in Sub-Saharan Africa, and it continues to lead the way in construction innovation by offering sustainable building and construction products and solutions that utilize high-performance new technologies.

In 2022, Patel acquired an additional 7.9 million shares worth Ksh293.4 million ($2.52 million) in Bamburi Cement, making him the fourth-largest shareholder in the leading cement manufacturer.