Cement sales in SA up due to absence of imports
PPC has reported in its trading statement and operational update that basic earnings are expected to decrease by more than 20% compared to the comparable period ended 31 March 2019.
These movements are after taking into account impairments of property, plant and equipment, expected credit losses and other fair value adjustments.
The general economic environment and the Covid-19 pandemic will have a material impact on these adjustments, which are being finalised. PPC will provide further guidance once reasonable certainty has been established on the range.
As previously advised, PPC expects to publish its group’s financial results for the year-ended March 2020 on or about 31 August 2020.
OPERATIONAL UPDATE MAY – JUNE 2020
PPC’s cement operations ramped up in May 2020 post the lifting of the COVID-19 restrictions imposed at the end of March 2020 across most of the jurisdictions in which the Group operates.
As already reported on 30 April 2020, sales volumes were significantly impacted in April 2020.
In May 2020, South Africa cement sales volumes were still around 30 -35% below May 2019 as the operations gradually resumed.
In PPC International the May cement sales volumes were less than 5% below the same period in 2019, mainly driven by strong sales volumes in Rwanda.
The demand recovery has been strong in June 2020, as the cement sales volumes in South Africa grew by double digits compared to June 2019. This recovery is mostly driven by the absence of imports that has given an opportunity for local producers like PPC South Africa to grow.
In line with earlier communication and action plans, PPC considers it crucial for the sustainability of the local cement industry that substandard cement and imports are properly addressed.
Cement sales volumes in PPC International also show a year-on-year growth in the month of June 2020.
On the back of the improved sales volumes and the various cost and cash preservation measures, the cash flows for the last two months have shown a positive trajectory.
PPC continues to have the support of its lenders to navigate the impact of the health and economic crisis. The discussions with the lenders around the announced capital restructuring continue in a constructive climate. More information on this important project will be shared at the announcement of the FY20 annual results.