PPC mothballs Jupiter milling plant and Slurry and Dwaalboom swing kilns
A significant increase in impairments to R267 million (FY23: R61 million) in the current year relate primarily to property, plant and equipment as muted market volumes are expected to persist and there is a need for capacity and cost optimisation going forward.
Consequently, it was decided to mothball the Jupiter milling plant (impairment of R56 million) and Slurry and Dwaalboom swing kilns (impairment of R125 million), although all these assets remain readily available for re-commissioning should volume demand be there. Given the muted demand experienced by the aggregates business, which is not expected to change materially in the future, an impairment of R70 million was taken on the aggregates assets. The prior year impairment related primarily to impairments in the readymix business.
During the prior period the group realised a R23 million profit on the disposal of its equity accounted investment in Habesha, Ethiopia.
PPC remains vulnerable to high input cost inflation and local logistics and power challenges, penalising the production cost per ton. Against the backdrop of a 4,2% decline in overall volumes (cement and clinker), total costs increased by 3,2%, with fixed costs increasing by 2,9%, ameliorated by reduced depreciation and the absorption of fixed costs in inventory build-up during the current year.
