AUDITED GROUP INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2013 2 31.12.2013 Ksh M 31.12.2012...
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Transcript of AUDITED GROUP INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2013 2 31.12.2013 Ksh M 31.12.2012...
AUDITED GROUP INCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2013
2
31.12.2013 Ksh M
31.12.2012Ksh M %
Turnover 14,179 11,401 24%
EBITDA 3,051 2,666 14%
Profit before Tax 2,000 1790 12%
Taxation 651 545 19%
Profit After Tax 1,349 1246 8%
EPS Ksh. 2.73 2.52 8%
3
Assets 31 /12 /2013 Assets 31 /12 /2012 -
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Non - Current Assets
22,857
Non - Current Assets
19,017
Trade & Other Re-ceivables 2,812
Trade & Other Re-ceivables 2,029
Inventories 2,529
Inventories 3,316
Cash & Bank 1,507
Cash & Bank 2,591
GROUP BALANCE SHEET
TOTAL ASSETS AS AT DECEMBER 31, 2013– KSH M
Total 29,705
Total 26,953
4
Liabilities 31/12 /2013 Liabilities 31 /12 /2012 -
5,000
10,000
15,000
20,000
25,000
30,000
35,000
L.T. Borrowings 12,001
L.T. Borrowings 11,074
S. T. Borrowings 4,267 S. T. Borrowings
3,917
Deferred Tax 2,234 Deferred Tax
2,255
Retained Earnings 6,428
Retained Earnings 4,946
Share capital & Other Reserves 1,696 Share capital & Other
Reserves 2,068
Trade & Other Payables 3,079
Trade & Other Payables 2,693
Total 29,705
GROUP BALANCE SHEET
TOTAL LIABILITIES AS AT DECEMBER 31, 2013 – KSH M
Total 26,953
GROUP CASH FLOW STATEMENTFOR THE PERIOD ENDED DECEMBER 31, 2013
SOURCES OF FUNDS Ksh M
Cash Generated from Operations 2,521
Decrease in inventories 786
Increase in Payables 541
Increase in borrowings 1,277
Decrease in cash 1,084
Total Sources 6,209
5
GROUP CASH FLOW STATEMENTFOR THE PERIOD ENDED DECEMBER 31, 2013
APPLICATION OF FUNDS Ksh M
Interest Paid 581
Tax Paid 181
Dividends Paid 248
Increase in Trade/Other Receivables 783
Capital Expenditure: 4,416
Total Applications 6,209
6
2005 2006 2007 2008 2009 2010 2011 2012 20130
2000
4000
6000
8000
10000
12000
14000
16000
2,2242,606
3,8824,619
5,145
5,965
8,267
11,401
14,179
HISTORICAL PERFORMANCETURNOVER KES M
GROUP TURNOVER
Grows 24% over previous year
Cement sales grows 31%
Cement 86% of the total business
7
CAGR 23% per year
2005 2006 2007 2008 2009 2010 2011 2012 20130
500
1000
1500
2000
2500
3000
3500
410509
9921,172
1,290
1,652
2,167
2,666
3,051
HISTORICAL PERFORMANCEEBIDTA KES M
EBIDTA
EBITDA increased by 14%
Combination of local and imported clinker
Dar plant production is based on imported clinker
8
CAGR 25% per year
2005 2006 2007 2008 2009 2010 2011 2012 20130
300
600
900
1200
1500
1800
2100
296388
621 705
949
1,113
1,363
1,790
2,000
PROFIT BEFORE TAX
Profit Before Tax has increased by 12%.
HISTORICAL PERFORMANCEPROFIT BEFORE TAX KES M
9
CAGR 24% per year
2005 2006 2007 2008 2009 2010 2011 2012 20130
500
1,000
1,500
200265
422503
646
1,0751,150
1,246
1,349
PROFIT AFTER TAX
Increases by 8%
HISTORICAL PERFORMANCEPROFIT AFTER TAX KES M
CAGR 24% per year
10
HISTORICAL PERFORMANCEEARNINGS & DIVIDENDS KES PER SHARE
2005 2006 2007 2008 2009 2010 2011 2012 20130.00
0.50
1.00
1.50
2.00
2.50
3.00
0.42 0.55
0.85 1.02
1.30
2.17 2.32
2.51 2.73
0.15 0.2 0.25 0.25 0.3 0.35 0.40.5
0.6
DPS
EPSEPS AND DPS
The rapid growth over the last Few Years Has Been Part Funded With Retained Earnings. Dividend Payout is 22% of Earnings and has increased by 20% in 2013.
11
HISTORICAL PERFORMANCETOTAL ASSETS KES M
2005 2006 2007 2008 2009 2010 2011 2012 20130
5,000
10,000
15,000
20,000
25,000
30,000
3,2384,254 4,505
6,352
12,120
16,565
20,549
26,953
29,705INVESTING IN CEMENT CAPACITY
Over the last 5 years ARM has invested In a 1,000,000 tons cement capacity in Kenya made up of an integrated clinker and cement capacity in Kaloleni and grinding capacity in Athi River.
During 2011, ARM acquired a cement grinding plant with 100,000 tons capacity in Kigali, Rwanda.
The Dar Cement plant with a capacity of 750,000 tons was commissioned in October 2012 and the 1,200,000 ton clinker plant in Tanga will be ready for commissioning in June 2014
12
SHORT TERM A1 :
Highest certainty of timely payments, liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor.
LONG TERM A :
Good investment Grade, indicating high credit quality, good protection factors, risk factors are small and variable due to economic cycles
HISTORICAL PERFORMANCECREDIT RATING
YEAR SHORT TERM
LONG TERM
2007 A1 A
2008 A1 A
2009 A1 A
2010 A1 A
2011 A1 A
2012 A1 A
2013 A1 A
13
HISTORICAL PERFORMANCEMARKET CAP GROWTH
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Mar 13 Dec 130
100
200
300
400
500
600
39 83 93 91 111172 207 241
402
500
US
D
SHARE PRICE REFLECTS INCREASED INSTITUTIONAL INTEREST
Increasing interest from institutional investors in the cement sector has enabled competitive industry benchmarked pricing
Over 15% of the free float of 48% is held by institutional investors
Whilst forward capacity utilization and earnings factored in the current price, new capacity of 1.5 m tpa under construction In Tanzania not reflected in share price
In January 2013, The Company Shares were split 1 to 5 NSE.
MARKET CAP GROWTH
Dec 2005 US$ 32 M15TH NOV 2013 US$ 472M
14
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -
2,000
4,000
6,000
8,000
10,000
228 428 659 1,296
1,653
2,341
3,473
5,759
6,719
9,158
KENYA CUMMULATIVE AFTER TAX CASH GENERATION KSH 9.15 BILLION
2004 TO 2013
Dividends1.48 B20%
Investment in Tanzania Cement
0.6 B8%
Investment in Kenya Cement 6.22 B68%
Investment in other subsidiaries
0.8 B11%
KENYA CUMMULATIVE AFTER TAX CASH UTILIZATION KSH 9.15 BILLION
2004 TO 2013
2008 2009 2010 2011 2012 20130
5,000
10,000
15,000
444
2,246
3,680
6,936
10,570
14,459
CUMMULATIVE INVESTMENT IN TANZANIA CEMENT KSH 14.5 B
2008 TO 2013
GROUP NET DEBT KES M
2005 2006 2007 2008 2009 2010 2011 2012 20130
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
1,1061,887 1,628
2,700
4,407
7,519
10,288
12,400
14,761
18
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -
1,000
2,000
3,000
4,000
5,000
348
1,077
1,809 1,580
2,625 2,914
3,067
4,330
3,520 3,248
KENYA NET DEBT KSH M
2009 2010 2011 2012 20130
2,000
4,000
6,000
8,000
10,000
12,000
1,487
4,452
5,903
8,880
11,013
TANZANIA NET DEBT WITH AFC CONVERTIBLE NOTES KSH M
2009 2010 2011 2012 20130
2,000
4,000
6,000
8,000
10,000
1,487
4,452
5,903
6,850
8,057
TANZANIA NET DEBT EXCLUDING AFC CONVERTIBLE NOTES KSH M
TANZANIA DEBT PROFILEUSD M KSH B
1 PTA/DBSA 35 2.8
2 AUREOS 10 0.9
3 ELN - NIC 20 1.7
4 STANBIC BANK 15 1.3
5 AFC (Equity Convertible Notes) 50 4.5
TOTAL DEBT WITH AFC 130 11.0
TOTAL DEBT WITHOUT AFC 80 6.5
EQUITY - KENYA CASH INJECTION 6 0.5
EQUITY - AFC 50 4.5
TOTAL EQUITY 56 5.0
DEBT TO EQUITY (80/56) 59:41
CAPACITY VALUATION
ARM CAPACITY 2.6 MTPA
VALUATION PER TON OF CAPACITY INDUSTRY AVERAGE
USD 325 PER TON
POTENTIAL VALUATION
2.6 MTPA x USD 325=
USD 845 M
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20190
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
22000
Installed and Projected New Capacity with Local and Im-
ported Clinker
@ 8% growth
@12% growth
@16% growth
Installed and Projected New Capacity with Local
Clinker
EAST AFRICA AND REGIONAL MARKETS DEMAND NEW GRINDING CAPACITY LIKELY TO INCREASE FASTER THAN NEW CLINKER CAPACITY
AND CATCHING UP WITH DEMAND
Actual demand 2013 9.9 million tons
24
5 Million Ton per year clinker deficit
KENYA CLINKER CAPACITY SHORTFALL
2013TOTAL CEMENT
CONSUMPTION 4.5 mtpa
TOTAL CAPACITY MET WITH LOCAL CLINKER
3.0 mtpa
TOTAL CEMENT CONSUMPTION MET WITH
IMPORTED CLINKER 1.5 mtpa
25
with imported clinker33%
With Locally manufactured
clinker67%
TANZANIA CLINKER CAPACITY SHORTFALL
2013TOTAL CEMENT
CONSUMPTION 3.5 mtpa
TOTAL CAPACITY MET WITH LOCAL CLINKER
1.9 mtpa
TOTAL CEMENT CONSUMPTION MET WITH
IMPORTED CLINKER 1.6 mtpa
26
with imported clinker46%
With Locally manufactured
clinker54%
BUT IMPORTED CLINKER IS MORE EXPENSIVE
Local Manf Cost Imported Clinker(Ex-Mombasa)0
50
100
150
200
10080
50
16
26
Ex Factory/FOB Freight Duties Port Charges
Imported Clinker Cost 72 % Higher
100
172Actual Figures based to 100
27
VIEW OF THE 4,000 TPD TANGA PLANT 28
STRATEGY 2015- 2020
STRATEGIC INTENT AND SHAREHOLDER VALUE
PROPOSITION
• Make ARM Cement the largest cement manufacturer in the region with capacity doubling to 5 Million tons.
• Operate at internationally benchmarked efficiencies and maintain valuation of US $ 300 + per ton of installed annual cement capacity
29
ARM CEMENT LTDTHE COMPANY ON THE MOVE
