ARM Cement Advances to Record High on Sales Bets: Nairobi MoverEric Ombok
ARM Cement Ltd., Kenya’s second-biggest maker of the building material, rose to a record, boosted by speculation that 2012 profit increased.
The stock surged 6.2 percent to 60 shillings by the 3 p.m. close in Nairobi, the capital. More than 14 million shares traded, 96 times the three-month daily average, according to data compiled by Bloomberg.
“We expect to see a significant growth in profit,” Eric Munywoki, a research analyst at Nairobi-based Old Mutual Securities Ltd., said by phone. The first phase of the Tanzanian plant became operational in August, which will boost sales by as much as 1 billion shillings ($11.4 million), he said.
The company’s total production will rise to 2.6 million metric tons a year from 1.1 million metric tons when ARM’s Tanzania plant becomes fully operational in the first half of this year, he said.
Net income climbed to 826.5 million shillings in the nine months through September from 193 million shillings a year earlier, the Nairobi-based company said in October. Revenue jumped 29 percent to 7.74 billion shillings, ARM said.
ARM, formerly known as Athi River Mining Ltd., proposed a five-for-one share split last year that came into effect Dec. 24. The stock has climbed 37 percent this year, compared with a 11 percent advance for the Nairobi Securities Exchange All-Share Index.
Gains are also being driven in part by the share split, Aly-Khan Satchu, chief executive officer of Nairobi-based investment company Rich Management Ltd., said by phone.