Bamburi Cement will pay five per cent more in dividends for the full year ended December 2012 despite a 16.68 per cent drop in profits after tax.

The cement maker, which is a subsidiary of global building materials manufacturer Lafarge on Thursday said that it will increase its final dividend for the period ended December to Ksh8.50 ($0.099) from Ksh8 ($0.097) paid at the end of December 2011.

This will bring the total dividend paid for the last full year to Ksh10.50 ($0.122) from Ksh10 ($0.121) paid for the period ended December 2011.

The cement maker said that its profit after tax dropped to Ksh4.88 billion ($56.61 million) for the period ended December 2012 from Ksh5.85 billion ($70.8 million) for the period ended December 2011.

The drop in profits was as a result of a 9.74 per cent increase in operating costs and lower exchange gains on foreign currency cash balances which were partially reduced by higher investment income on cash deposits.

Bamburi said that its revenues rose by 4.48 per cent to Ksh37.49 billion ($434.74 million) from Ksh35.88 billion ($433.63 million) as a result of growth in exports into the rest of the continent from Uganda and growth of sales in Kenya despite increased competition.

However, political instability in some of its export markets from Uganda reduced the exports in the second half of the year.

“The reduction in operating profit was due to a difficult cost environment driven by high inflation, removal of power subsidies in Uganda that resulted in a 70 per cent power cost increase and a higher than budget reliance on imported clinker in Kenya before the commissioning of the bag filter project in the last quarter of 2012,” said Bamburi in a statement.

The final dividend will be paid on June 15 to shareholders on the register on April 2.