Although trading conditions in Zimbabwe were characterised by a challenging economic environment and the impact of COVID-19 related lockdown restrictions, domestic cement volumes grew by 5% – 10%, supported by ongoing infrastructure projects.
PPC Zimbabwe cement sales grew in the similar range, supported by an increase in volumes of 35% to 40% in Q2. The positive sales momentum has continued into October and November, albeit at a normalised rate.
Revenue increased by 60% to R797 million (September 2019: R497 million). Cement pricing was adjusted to account for the increase in inflation and the devaluation of the local currency. Realised selling prices in US$ increased by 23%.
EBITDA improved by 62% to R326 million (September 2019: R201 million) and EBITDA margins improved to 40.9%, versus 40.4% in September 2019. PPC Zimbabwe continues to meet its debt obligations in-country while remaining financially self-sufficient, and recently declared a dividend to its shareholders of US$6.6 million, of which PPC is entitled to US$4.7 million. PPC received US$4.4 million after withholding tax.
Although the group is experiencing positive sales momentum across most of its markets, PPC remains cautious on the outlook for the rest of FY21 given the ongoing health crisis and its resultant impact on economic activity. PPC will remain focused on cash preservation and improving cost competitiveness by lowering operational costs.