Kenya's ARM Cement says profit growth to continue in 2014 - CNBC Africa

Kenya's ARM Cement says profit growth to continue in 2014

Earnings

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ARM Cement Limited posted a 12 per cent rise in full-year pretax profit in 2013. PHOTO: Getty Images

This is after it posted a 12 per cent rise in full-year pretax profit in 2013.

ARM, which trails Bamburi Cement Limited in capacity, said improving demand in Kenya and Tanzania was likely to drive growth in 2014.

"Plans have been implemented to improve capacity utilisation and increase operational efficiency in Kenya and Tanzania which will lead to improved profitability," the company said in a statement.

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East African cement consumption is growing thanks to vibrant economic growth, an expanding middle class and large infrastructure projects planned by governments.

Pretax profit for the 12 months ending December reached 2 billion shillings and earnings per share increased to 2.73 shillings from 2.52 shillings, the company said in a statement. Growth was driven by rising production in Tanzania.

It recommended payment of a final dividend of 0.60 shillings a share, up from 0.50 shillings a share in 2012.

ARM said it plans to start producing its own clinker, an ingredient of cement, within the second half of the year for use in its cement factory in the Tanzanian commercial capital Dar es Salaam.

"The Dar es Salaam plant manufactured cement using imported clinker. The profit margins are expected to improve after the Tanga clinker plant becomes operational in the second half of the year," the company said.

(WATCH VIDEO: ARM Cement Q3 Results with Deputy MD Surendra Bhati)

ARM said it would continue pursuing trade and investment opportunities in South Sudan despite fighting between rival factions which has displaced hundreds of thousands of people and limited trade.

"We shall continue keeping an eye on the South Sudan market for new opportunities. We have been distributing our products there and hope to improve our business," ARM deputy managing director Surendra Bhatia told Reuters.

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