PPC Group revenue for the 12 months ended 31 March 2022 increased by 11% to R9 882 million (March 2021: R8 938 million). Excluding Zimbabwe, group revenue increased by 5%. Revenue in PPC Zimbabwe increased by 34% off the back of a 28% increase in volumes.
Salient features (continuing operations)
- Group revenue R9,9 billion (March 2021: R8,9 billion)
- Group EBITDA R1,5 Billion (March 2021: R1,6 billion)
- Earnings/(loss) per share (5) cents (March 2021: 65 cents)
- Headline earnings/(loss) per share (3) cents (March 2021: 3 cents)
- Cash generated from operations R1,5 billion (March 2021: R1,4 billion)
- The group did not declare a dividend in the current or previous period
Roland van Wijnen, CEO, said:
“Our resilient cash generation demonstrates our focus on one of the most important measures of financial performance. These results were further supported by our efforts to drive efficiencies which helped mitigate inflationary pressures. Ultimately, Team PPC was able to reduce net debt by R1,2 billion and finalise the work to achieve a solid financial position. Furthermore, we have set our decarbonisation strategy in motion and are committed to tackling climate change head on. I extend my gratitude to all our customers for their continued support and to my colleagues who have worked diligently to ensure PPC continues to sustain its purpose of empowering people to experience a better quality of life.”
REVIEW OF OPERATIONS
The group, in accordance with IFRS 5 – Non-current assets held for sale, continues to account for PPC Barnet as a discontinued operation. Accordingly, the assets, liabilities and profit or loss are reported separately in the financial statements for the year ended 31 March 2022. For the year ended 31 March 2021, PPC Barnet, PPC Lime and Botswana Aggregates were all accounted for as discontinued operations. During the year under review, PPC Lime and Botswana Aggregates were sold with effect from 30 September 2021 and 16 September 2021 respectively. Regarding PPC Barnet, binding long-form agreements for the restructure of the senior lender debt were signed on 19 April 2022 and all the conditions precedent were met on 29 April 2022, from which date PPC will cease to consolidate PPC Barnet.
Total costs, being cost of sales together with administration and other operating expenditure, increased by 19% to R9 360 million (March 2021: R7 887 million). The increase in total costs is significantly affected by an increase in PPC Zimbabwe’s costs of 85%. Other than continuing hyperinflation and the 42% depreciation of the Zimbabwean dollar (ZWL dollar) against the South African rand (ZAR), the most significant line item was an increase in PPC Zimbabwe’s depreciation expense to R386 million (March 2021: R24 million) due to the application of the effective rate method of hyperinflating depreciation in the current year. Costs, excluding depreciation and PPC Zimbabwe, increased by 7% with efficiency gains offsetting input cost inflation.
Profit before tax from continuing operations decreased from R1 765 million to R186 million, due to the items set out below:
- PPC Zimbabwe incurred a loss before tax of R67 million (March 2021: R263 million profit)
- Excluding PPC Zimbabwe’s portion, fair value adjustments and foreign exchange movements resulted in a gain of R18 million (March 2021: R148 million loss)
- Impairments of R38 million (March 2021: R1 317 million reversal)
- An IFRS – Share-based payment charge of R36 million (March 2021: R21 million).
Excluding the above in both the current and the prior year, operating profit from continuing operations would have decreased by R43 million or 11%.
As PPC experiences a normalisation of cement demand in South Africa following the post-COVID-19 spike, the group will redouble its efforts to improve cost competitiveness through improved industrial performance and operational excellence. To this end, Mokate Ramafoko, former head of PPC International Holdings (Pty) Ltd, has been appointed as the group managing director for Industrial and Innovation, reporting directly to the group chief executive officer (CEO), Roland Van Wijnen. He will be responsible for industrial performance, new business and decarbonisation.
PPC’s international operations will be managed by the respective in-country boards.