21st October 2017
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Company Data
 
Bamburi Cement Company Ltd.
http://www.bamburicement.com/
Par Value:                  5/-
Closing Price:           175.00
Total Shares Issued:          362959275.00
Market Capitalization:        63,517,873,125
EPS:             14.44
PE:                 12.119
 

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.
Average Price Over the last 5 Weeks
Average Price Over the last 5 Months
No. Of Shares Traded Over the last 5 Weeks
No. Of Shares Traded Over the last 5 Months
Market Capitalization Over the last 5 Weeks
Market Capitalization Over the last 5 Months
Data Source: Nairobi Stock Exchange
Trading Day: 19 Oct 2017
 
Downloads
 
  05-OCT-2017 ::  Change in Directorship
  Change in Directorship

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  25-AUG-2017 ::  HALF YEAR RESULTS
  Unaudited Group Results for the Six Months Ended 30th June 2017.

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  09-JUN-2017 ::  Public Notice
  Public Notice

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  10-MAR-2017 ::  Audited Group Results for the Year Ended 31st December 2016.
  Audited Group Results for the Year Ended 31st December 2016.

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