The half year results were a bit of a shock. I expected to see 30-40% growth bearing in mind the reconstruction effort. Instead, cement sales were flat (reading between the lines), working capital requirements increased meaning it didn’t sell as much as it was producing. Annualised EPS of 4.60 means 7% yoy growth for the full year, basically lower than Bamburi’s 2006/7 growth. The spilt of the businesses will show the continued growth in fertilisers and lime and may actually have a downside because most of us have been buying the stock because of the ongoing boom in construction industry.
I expect to see investors selling off Athi River in the short-term until they are able to compare its half numbers with those of Bamburi when it announces late July or early August.
With most of the FFIs having downloaded their Safcom holdings, investors will probably play a wait and see game while awaiting the entry of Telkom Orange and Econet in August and September.