PPC: Increased demand required to utilise the capacity

Roland van Wijnen, CEO PPC, said that profitability shows improvement across our core southern African markets, despite the weak macro environment and decline in cement volumes in South Africa. Moreover, the rolling out of the South African government’s infrastructure development plans and protection of the local cement market through the introduction of import tariffs to create a level playing field for domestic producers, remain elusive.

Increased demand is required to enable us to more effectively utilise the capacity available in our primary market. PPC Zimbabwe saw a strong recovery across all key metrics when compared to the negative impact of the planned shutdown in the prior comparative period. Accounting has been simplified following the adoption of the US dollar as its functional currency.

PPC Zimbabwe continues to declare and pay dividends. Reaching an agreement to dispose of PPC’s 51% stake in CIMERWA (Rwanda) is an important step in PPC’s strategy of focusing on its core southern African markets. 

Snapshot of performance from continuing operations

Consolidated group

• Revenue up 20,9% to R6 172 million (H1 FY23: R5 103 million)
• EBITDA margin up 3% pts to 17,3% (H1 FY23: 14,3%)
• EBITDA up 46,8% to R1 069 million (H1 FY23: R728 million)
• HEPS of 26 cents (H1 FY23: loss of 5 cents)
• EPS of 24 cents (H1 FY23: loss of 3 cents)
• Agreement to dispose of PPC’s 51% stake in CIMERWA (Rwanda) concluded on 17 November 2023 for US$42,5 million

Reporting simplified due to hyperinflation no longer being applicable in the current reporting period.

SA and Botswana group

• Resilient performance in a challenging market
• Revenue, excluding dividends received, increased 2,0% to R3 546 million (H1 FY23: R3 477 million)
• SA and Botswana cement EBITDA margins increased to 12,6% (H1 FY23: 12,2%)
• After spending R103 million on the share repurchase programme, net debt for the SA and Botswana group nonetheless reduced by R195 million (R70 million since FY23) to R730 million (H1 FY23: R925 million)

PPC Zimbabwe

• Strong recovery following impact of planned extended kiln shutdown in prior comparative period
• Revenue up 104% to R1 743 million (H1 FY23: R855 million)
• EBITDA margins increased to 24,6% (H1 FY23: 17,3%)
• Dividends of US$4,0 million paid (H1 FY23: US$5,0 million). A further dividend of US$7 million was declared by PPC Zimbabwe in November 2023.

CIMERWA (Rwanda)

• Continued positive trajectory notwithstanding margin pressures
• Revenue up 14,5% to R883 million (H1 FY23: R771 million)
• EBITDA margins decreased to 29,4% (H1 FY23: 32,3%)
• Net cash at 30 September 2023 – R107 million (FY23 net debt of R162 million)

Profit before tax for the group increased to R560 million (September 2022: R106 million) and profit after tax was R431 million (September 2022: R22 million). The effective tax rate for the current period is 23,0% (September 2022: 79%). The prior period rate was negatively affected by a once off de-recognition of a deferred tax asset in PPC Ltd and the impact of PPC Zimbabwe inflation.