PPC reports on South Africa and Botswana cement business
Cement sales volumes in South Africa and Botswana decreased by 6% period-on-period for the five months ended August 2023. Cement sales volumes in the inland region continued their decline, albeit at a significantly lower rate, while the coastal region saw a downturn in volumes following higher than usual rainfall and weak retail demand.
The average selling price increased by 10% during the period under review as bi-annual increases were implemented in January and July 2023. Notwithstanding the lower volumes, this resulted in revenue growth of 5%. EBITDA for the period also increased by 5% as margins stabilised when compared to the comparable period.
PPC will continue its efforts to counter input price inflation through price adjustments, operational efficiencies and improved industrial performance. SA and Botswana group’s gross debt remains unchanged from 31 March 2023, but cash has increased from R131 million to R283 million, leaving net debt at R648 million at 31 August 2023 from R800 million at 31 March 2023.
The BEE transaction announced on SENS on 7 August 2023 for 10% of PPC South Africa Holdings Proprietary Limited (“PPC SA Holdings”) is for the benefit of PPC’s South African employees. Qualifying South African employees therefore participated in the amount paid by PPC Cement SA (Proprietary) Limited to PPC SA Holdings to enable it to declare a dividend to PPC, which will be utilised to fund the share repurchase of R200 million announced in June 2023.
OUTLOOK
PPC’s outlook remains unchanged and it will continue to focus its resources on improving profitability and cash generation in South Africa while preserving its sound market positions in Zimbabwe and Rwanda. There continues to be a need for operational efficiencies and cost containment measures to mitigate rising input costs as the economic climate in PPC’s key South African market remains muted. As previously highlighted, PPC South Africa is well positioned to benefit from an increase in cement demand. PPC Zimbabwe anticipates a continued recovery and the outlook for CIMERWA in Rwanda remains positive.
