Bamburi to Tap Kenya Infrastructure Boom as Profit Tumbles
Bamburi Cement's pretax profit slumped 28 percent to 2.3 billion shillings ($26.20 million) in the first half of 2014, the company said on Thursday, as it outlined plans to profit from Kenya's ambitious infrastructure spending plans.
Controlled by French firm Lafarge SA (LFRGY), Bamburi is the biggest cement maker in east Africa's largest economy, where a construction boom driven by infrastructure projects and real estate has helped boost demand for cement.
"We are optimistic that the business environment will progressively improve in the second half of the year," the company said in a statement, citing upcoming infrastructure projects in Kenya.
Bamburi said it expects Kenya's planned infrastructure projects, including roads, railways and a new Indian Ocean port in Lamu, to improve sales.
Kenya's government in June raised $2 billion through a debut Eurobond and said most of the proceeds would be used to finance infrastructure projects.
Bamburi said profit in the six months to end-June took a hit due to the higher cost of power and imported clinker.
Turnover grew to 17.3 billion shillings in the first half from 15.8 billion registered in 2013, buoyed by stronger sales both within Kenya and the region.
(1 US dollar = 87.8000 Kenyan shilling)
(Editing by Drazen Jorgic, editing by David Evans)