ARM Ce­ment half-year losses up 400 per cent

In May the firm cited strained cash flow as well as in­creased com­pe­ti­tion and lower sell­ing prices for its poor per­for­mance

The Star (Kenya) - - News | Business -

timal util­i­sa­tion rates, hence rais­ing op­er­a­tional ex­pen­di­ture and com­press­ing mar­gins among ce­ment pro­duc­ers, es­pe­cially given the re­gion’s price stag­na­tion,” the re­port stated.

The firm’s rev­enue for the six­month pe­riod de­clined by 19.79 per cent to Sh5.35 bil­lion com­pared to Sh6.67 bil­lion last year.

In May the firm, whose shares trade on the Nairobi Se­cu­ri­ties Ex­change, cited strained cash flow as well as in­creased com­pe­ti­tion and lower sell­ing prices as key fac­tors con­tribut­ing to its poor per­for­mance.

Data col­lated by the Kenya Na­tional Bureau of Sta­tis­tics shows that ce­ment pro­duc­tion for the first six months of the year went down by 3.93 per cent to 3.18 mil­lion met­ric tonnes from 3.31 mil­lion met­ric tonnes dur­ing the same pe­riod last year.

Ce­ment con­sump­tion in Kenya fell by 62,000 met­ric tonnes in the first five months of the year, rais­ing the prospect of the first an­nual de­cline in con­sump­tion in more than a decade.

Data by the state statis­ti­cian shows that ce­ment con­sump­tion for the pe­riod be­tween Jan­uary and May fell by 2.34 per cent to 2.5 mil­lion met­ric tonnes from 2.56 mil­lion met­ric tonnes con­sumed the same pe­riod last year.

“The quan­tity of ce­ment pro­duced dropped from 509,589 tonnes in May 2017 to 500,109 tonnes in June, 2017. Con­sump­tion of ce­ment con­tracted from 497,087 tonnes in April 2017 to 457,937 tonnes in May 2017,” KNBS said in the June eco­nomic indi­ca­tor re­port.

The coun­try’s largest ce­ment maker Bam­buri Ce­ment also re­ported net profit de­clines of about 36.21 per cent to Sh1.58 bil­lion with a 8.21 per cent drop in rev­enue to Sh17.54 bil­lion.

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