Despite a topline decline of 5%, the cement producing company with operations in both Kenya and Uganda, and which is listed in the Nairobi Securities Exchange, posted a Pre Tax profit of Kes 1,776 million in the financial year ending 31 December 2020.
This is a 144% increase over the Kes 728 million realised in 2019. The Group attributed the decline in topline to adverse impact of stringent Covid-19 containment measures announced by the Kenya and Uganda governments at the onset of the pandemic in March 2020.
According to the company, the containment measures involving curfews, lockdowns and restriction of movement for goods and people across borders in the first half of 2020 caused the Group topline to decline by 13%. However, the company registered a recovery in the second half of 2020, thanks to the easing off of the containment measures.
The growth in the Group’s Pre Tax profit was driven by a significant 77.5% growth in operating profit in 2020 to Kes 1,983 million (2019: Kes 1,117 million). Additionally, a 47% reduction in net finance costs to Kes 207 million from Kes 369 million in 2019, further contributed to the growth in Pre Tax profit.
The Group attributes the good performance to the launch and implementation of the “Health, Cost and Cash” (HCC) agenda adopted at the onset of the Covid-19 pandemic to build resilience in, and crisis-proof the business. In the execution of the HCC agenda, the three pillars of Health preservation, Cost Optimisation and Cash protection were prioritized as key business deliverables during the pandemic crisis.
Cost optimization throughout the company, coupled with significant turnaround of the Uganda subsidiary after a depressed 2019 performance attributed to the closure of the Uganda-Rwanda border, cushioned the Group’s bottomline from impact of the topline decline to Kes 34,884 million in 2020 (2019: Kes 36,796 million).
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