Undertake a financial analysis and interpretation of the financial performance, financial position and cash flow position for the year 2017 and 2018 inshown below

BAMBURI CEMENT LIMITED The Directors of Bamburi Cement Limited and its subsidiaries (together "the Group") are pleased to announce the audited Group results for the year ended 31 December 2018. Summarised Consolidated Statement of Prot and Loss or Other Comprehensive Income KES Million KES Million Turnover 37,262 35,974 Total operating costs (36,427) (31,745) Operating profit 835 4,229 Finance income 103 150 Finance costs (258) (263) Finance costs net (155) (133) Profit before tax 680 4,116 Taxation (6_6) (2,143 1 Prot for the year 614 1,973 Other comprehensive income net of tax 776 4,493 EPS - KES per Share 2.45 4.54 Summarised Consolidated Statement of 2018 2017 Financial Position Actual Actual KES Million KES Million Assets Non-current assets Property, plant & equipment Prepaid operating leases Intangible assets Other equity investments Biological assets Limestone reserves Goodwill 36,234 124 244 180 399 525 217 37,913 Working capital Current assets Current liabilities 10,078 Dividend payable Cash and bank balances Capital and reserves Share capital Reserves Equity attributable to owners of the Company Non-current liabilities Non-controlling interests Summarised Consolidated Statement of Cash 2018 2017 Flows Actual Actual KES Million KES Million Cash generated from operations 3,712 6,458 Interest received 103 150 Interest paid 197) (25) Tax paid (795) (1,632) Net cash generated from operating activities 2,823 4,951 Net cash used in investing activities (4,957) (6,841) Net cash used in financing activities 1,076 (3,085) Net decrease in cash & cash equivalents (1,058) (4,975) At beginning of the year 2,040 6,972 Effects of foreign exchange rate changes (19) 43 At end of the year 963 2.040 Summarised Consolidated Statement o 2018 2017 Changes in Equity Actual Actual KES Million KES Million Share capital Revaluation reserve amb 1,815 1,815 11,906 11,263 Fair value and translation reserve (2,042) (1,669) Retained earnings 18,032 17,963 Non-controlling interests 3,752 3,828 At end of the year 33,463 33,200 Explanatory notes: These results are extracted from the consolidated financial statements of Bamburi Cement Limited for the year ended 31 December 2018. The financial statements were audited by Deloitte & Touche and have received an unmodified opinion. 3HIGHLIGHTS OF 2018 FINANCIAL YEAR Revenue The Group's turnover grew by 3.7% from KES 36 billion in 2017 to KES 37.2 billion in 2018. Cement volumes grow by 9%. The Group achieved this growth despite a market decline of 5% in Kenya, our biggest market, and a at cement market in Uganda. Increased competitive pressure fuelled by a growing gap between installed cement grinding capacity and the shrinking market has played a key role in market dynamics. However, the overall topline growth in a declining market is a clear indication that the execution of our "Building for Growth" strategy has put us on solid track to consolidate our market leadership position. Operating Prot The Group operating prots reduced to KES 0.8 billion in 2018 from KES 4.2 billion in the prior year. Despite the increase in turnover, there was a higher cost environment relating to higher energy costs (power, coal and petcoke), imported clinker and raw materials' input prices. Uganda was further impacted by additional provisioning mainly on receivables. The net result of all these being that operating prot in Kenya remained at compared to 2017 and declined in Uganda. Cash ow Cash generated from operating activities at KES 3 billion was lower than for prior year at KES 5 billion mainly on account of lower operating prot. Uganda closed the year in a net borrowing position, while Kenya remained cash positive. 2019 OUTLOOK In the second half of 2018, the Group completed the rst phase of the capacity expansion projects in both Kenya and Uganda, at a total cost of KES 7.9 billion. These have put us in a strong position to leverage growth opportunities in our markets and to further solidify our market leadership position. The market is expected to rebound in both Kenya and Uganda in 2019. However, the difculties experienced at the Ugandan/Rwanda border have signicantly impacted exports to Rwanda from Uganda and the Group hopes this matter is resolved expeditiously. The Group will continue to execute "Building for Growth" strategic agenda, while maintaining focus on cost optimisation in order to grow protably and competitively. DIVIDEND An interim dividend of KES 1.00 per ordinary share (KES 2.50 per ordinary share in 2017) amounting to KES 363 million (KES 903 million in 2017) was paid on 26 October 2018. The Board of Directors recommends payment of a nal dividend of KES 4.10 per ordinary share (KES 1.50 per ordinary share paid in 2017) subject to approval by shareholders at the Annual General Meeting. The nal dividend, amounting to KES 1.49 billion (KES 544 million in 2017), when added to the interim dividend already paid, brings the total dividend for the year to KES 5.10 per ordinary share (KES 4.00 per ordinary share in 2017)