PPC Rwanda sales down due to the impact of planned kiln shutdown
At 30 September 2022, CIMERWA reported an increase of cement sales volumes of 11% for the first six months of FY23 compared to the same period in FY22 when COVID restrictions were still affecting the Rwandan market.
Whilst market conditions continue to be positive, the sales volumes of CIMERWA are expected to be 8% to 11% lower in H2 FY23 due to the impact of a planned kiln shutdown for annual maintenance and the comparatively high H2 FY22 sales volumes following the removal of COVID restrictions in Rwanda. CIMERWA therefore expects sales volumes to be more or less flat for the full year and an increase of ASP in the range of 14% to 17%. Material future growth of sales volumes depends on the speed of implementation of planned investments to increase CIMERWA’s capacity.
EBITDA margins were reported to be 32% for the first six months driven by the implementation of cost reduction measures and an increase in the ASP. Despite maintenance costs associated with the kiln stoppage in H2 FY23, CIMERWA expects to report EBITDA margins in the range of 28% to 32% for FY23.
The outlook for cement demand in Rwanda and eastern Democratic Republic of Congo remains optimistic although PPC does note increased competitor pressure both in Rwanda and from neighbouring countries.
The shareholders of CIMERWA approved the payment of a Rwf10.5 billion dividend at the annual general meeting in February 2023. PPC expects CIMERWA to pay 51% of this dividend (approx. R80 million after withholding taxes) in late March 2023.
