PPC Group revenue for the current year up by 20,6%
Group revenue for the current year rose 20,6% to R10 058 million (FY23: R8 339 million) driven primarily by a strong performance in PPC’s Zimbabwean operation. The SA and Botswana group cement revenues increased only marginally by 5,2%, driven by price increases and increased sales of clinker to Zimbabwe, which positively offset the declining cement sales volumes. Revenue from the materials businesses declined by 6,0% relative to the prior year.
Group cost of sales increased 16,3% to R8 409 million (FY23: R7 231 million). All of the increase in cost of sales is attributable to Zimbabwe, with the SA and Botswana group’s cost of sales declining marginally by 1,3% (R73 million), driven by lower sales volumes. Group administration and other operating expenditure increased by 5,5%. Group EBITDA margin therefore improved to 12,3% (FY23:10,7%).
Accordingly, trading profit increased by R502 million to R619 million (FY23: R117 million). Of the R502 million increase, R395 million was attributable to Zimbabwe.
Depreciation for the group decreased by R155 million to R623 million (FY23: R778 million). The most material contributors to the decrease were PPC Zimbabwe and SA and Botswana cement. Due to the change in the functional currency for PPC Zimbabwe from the ZWL to the United States dollars (US$), hyperinflation accounting is no longer applicable, which resulted in a decrease in property, plant and equipment and an associated decrease in depreciation by R86 million. SA and Botswana cement also had a decrease in depreciation of R57 million, mainly due to the extension of useful lives of certain of the assets.
Given the movements in trading profit and depreciation, group EBITDA increased 38,6% to R1 242 million (FY23: R896 million).
The prior year net monetary loss arising from hyperinflation accounting for PPC Zimbabwe of R131 million is no longer applicable in the current year.
In the prior year, the credit risk adjustment on the intrinsic value of the blocked funds was taken to 100% resulting in a fair value loss of R32 million. Accordingly, the current period fair value loss is nil.
Profit before tax increased to R233 million (FY23: loss of R126 million) and profit after tax was R88 million (FY23: loss of R328 million). In the current year, the effective tax rate was some 62,8%.
During the current year, PPC Ltd received dividends from Zimbabwe and RSA Holdings (for purposes of the share buyback) all of which are non-taxable. This had the effect of increasing the proportion of non -taxable vs taxable income to 62% (FY23: 40%) resulting in 62% of all expenditure in the holding company not being tax deductible.
In PPC International Holdings, once-off costs related to the disposal of CIMERWA were also not deductible.
