Athi River Mining (ARM) shareholders will not receive dividends for the year ended June 2012. According to the company’s Board of Directors, the revenue will instead be used to finance other projects, including the construction of a cement plant in Dar Es Salaam.
“The best use of the reserve cash is for expansion purposes,” said Moses Waireri, a research analyst at Genghis Capital. He stated that the company intends to invest in its other assets before rewarding the shareholders.
ARM reported a 25% increase in profit for the first half of 2012. The company’s net profits rose to KES 550 million from KES 441 million the previous year. It recently poured KES 1.1 billion into investment activities which is down about 30% from KES 1.5 billion in 2011.
“The company remains confident of good performance in the second half of the year due to anticipated reduction in interest rates, stable currency and continuing demand for cement from the infrastructure sector,” said the Company Secretary, Ramesh Vora in a press release. He also noted that the Tanzania Branch may contribute to the company’s overall performance by increasing its revenue.