In the notice published on Tuesday, Bamburi said its projected net earnings for 2023 will be lower by at least 25 percent of the Sh181 million it posted in 2022. This means earnings will not surpass Sh135.8 million, which is 75 percent of the net income realised in 2022.

“The expected decline in net earnings is largely attributable to the one-off settlement of outstanding tax liabilities and legal disputes in Hima Cement Limited in Uganda as part of the closure of the sale transaction thereby impacting 2023 results,” the firm said,

Bamburi sold its entire 70 percent stake in the Ugandan subsidiary, Hima Cement for an estimated $84 million (Sh12 billion), a deal that was closed last month.

In May last year, details emerged that Bamburi was facing tax claims amounting to Sh1.2 billion by authorities in Kenya and Uganda, with the firm’s annual report showing that Kenya’s Treasury Cabinet Secretary Njuguna Ndung’u had declined its application for penalties and interest waiver worth Sh288 million.

The penalties arose from a tax assessment starting from 2007 to 2011.

At around the same time, the company had also been served with a demand for taxes totalling Sh956 million in Uganda where it was operating through Hima Cement, the subsidiary it has since offloaded.

The Sh181 million booked in 2022 was a 86.9 percent drop compared to the previous year, a level last seen 33 years ago, on the back of reduced sales and increased costs.

Bamburi

Following the release of the shocking results, the cement maker effected five board changes including the exiting of the CEO, the chief finance officer (CFO), company secretary and two non-executive directors.