Despite the initial COVID-19 related trading restrictions, PPC revenue increased by 1% to R5 006 million (September 2019: R4 948 million) due to robust cement sales post the easing of COVID-19 restrictions across the jurisdictions in which the group operates.
South Africa’s largest cement producer said a rebound in infrastructure spending kept earnings declines in check at PPC. Yesterday, JSE investors welcomed the progressive upturn in its business, and PPC shares were up 15.9%, hitting a seven-month high.
Roland van Wijnen, chief executive officer, said: “Our business has benefitted from a strong recovery in cement sales in all our markets post the easing of the lockdown restrictions, and this has resulted in improved financial performance for the Group. Our efforts to improve cost competitiveness and reposition PPC on a sound financial footing are yielding encouraging results, and we are making good progress on our capital restructuring project, which remains a key priority for the Group.”
Cost of sales reduced by 4% to R3 895 million (September 2019: R4 042 million, restated) compared with the previous year due to cost savings, the decline in volumes, and a reduction in depreciation and amortisation.
Administration and other operating expenditure declined by 10% to R492 million (September 2019: R548 million, restated) driven by the successful efforts to improve cost competitiveness. Group EBITDA increased by 15% to R996 million (September 2019: R868 million) with an EBITDA margin of 19.9% (September 2019: 17.5%). Operating profits increased by 77% to R610 million (September 2019: R344 million, restated).
Fair value adjustments and foreign exchange movements resulted in a loss of R366 million (September 2019: R120 million loss, restated), mostly as a result of the revaluation of foreign-denominated intercompany loan accounts.
Gross debt amounted to R5 218 million at 30 September 2020 (September 2019: R5 131 million). Gross debt declined by R582 million from 31 March 2020. The currency impact on foreign currency-denominated debt is a reduction of R304 million from 31 March 2020 to 30 September 2020.
The company also said Chief Financial Officer Ronel van Dijk was stepping down, with insider Brenda Berlin taking over from mid-February.