Bamburi Cement, a prominent cement firm in East Africa and partially owned by Kenyan industrialist Baloobhai Patel, has witnessed a substantial downturn in its earnings for the first half of 2023 due to the resolution of corporate tax issues in Uganda.
According to results released by Bamburi Cement, the company’s profits in the first six months of 2023 experienced a decline of 7.4 percent, dropping from Ksh95 million ($654,400) during the same period in 2022 to Ksh88 million ($607,000).
The half-year financial report revealed that, excluding the tax liability stemming from the Ugandan tax penalty, the corporation would have marked a considerable surge in its earnings, as its pre-tax profit increased from Ksh124 million ($854,100) to Ksh621 million ($4.27 million).
However, the company’s earnings took a significant hit due to the substantial increase in taxes, surging from Ksh29 million ($200,000) to Ksh533 million ($3.67 million), representing a striking 86 percent of the firm’s $4.27-million pre-tax profit.
In 2022, Bamburi Cement suffered a tax demand of Ksh956 million ($6.58 million) in Uganda, where it operates through its subsidiary, Hima Cement. While the exact amount of settlement remains undisclosed, the financial statement indicates that the profit after tax was adversely affected by the resolution of corporate tax matters in Uganda.
Bamburi Cement, recognized as one of the leading cement companies in East Africa, has earned its reputation for introducing pioneering construction solutions and fostering long-term growth in its operations.
The company’s expansive Mombasa cement plant ranks among the largest in Sub-Saharan Africa, and its commitment to innovation is evident through the offering of sustainable construction products and solutions utilizing cutting-edge technologies.
Patel, a Kenyan multimillionaire with diverse investment interests, owns a 4.12-percent stake in Bamburi Cement through his private investment company, Aksaya Investment.
Patel’s influence extends beyond Bamburi Cement, with stakes in notable entities such as financial services provider Sanlam and industrial gases giant Carbacid, underscoring his stature as a serial investor.
