Oct. 22 (Bloomberg) -- ARM Cement Ltd., Kenya’s second-biggest cement maker by market value, rose after saying profit in the first nine months of this year increased more than fourfold.
The stock gained 0.9 percent to 220 shillings in the capital, Nairobi, the highest closing price since Oct. 17. Earlier, the shares jumped as much as 4.9 percent to a record 238 shillings.
“The jump in the shares has a lot to do with the earnings but most of the profit was on the back of exchange-rate gains,” Kuria Kamau, a research analyst at Nairobi-based Kestrel Capital (East Africa) Ltd., said in a phone interview today. “Turnover is up which is positive and the prospects in the fourth quarter are higher after it begun production in Tanzania.”
Net income climbed to 826.5 million shillings ($9.7 million) in the nine months through September from 193 million shillings a year earlier, the Nairobi-based company said in a statement e-mailed by the city’s stock exchange today. Revenue jumped 29 percent to 7.74 billion shillings, ARM said.
Kenya’s shilling is little changed against the dollar this year through September after weakening 20 percent against the U.S. currency last year. The company made an exchange gain of 42 million shillings in the nine months through September, after making a provision for an unrealized foreign-exchange loss of 681 million shillings a year earlier, the company said.
The introduction of Rhino Cement, the brand of the building material produced by the company, in Tanzania last month is expected to boost sales in the fourth quarter, it said.
“The company remains optimistic about the business environment in the region, and expects the growth in demand for Rhino Cement and other products will continue,” ARM said in the statement. African Finance Corp. provided ARM with a $50 million convertible note last month, it said.
Shares in ARM have surged 51 percent this year, while the NSE All-Share Index has gained 31 percent
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