PPC Zim sees 68pc jump in revenue
Pretoria Portland Cement Limited (PPC) Zimbabwean operation revenue jumped 68 percent to US$93,3 million for the half year to September 30, 2023 compared to US$55 million recorded in the same period last year on improved operating environment.
PPC Zimbabwe continues to benefit from the use of the US dollar as the official currency in the country. The Government recently announced that the multi-currency regime will continue until 2030, which has further bolstered confidence.
“PPC Zimbabwe saw a strong recovery across all key metrics when compared to the negative impact of the planned kiln maintenance shutdown in the prior comparative period.
“Accounting has been simplified following the adoption of the US dollar as its functional currency. PPC Zimbabwe continues to declare and pay dividends,” said PPC Limited chief executive officer Roland van Wijnen.
Volumes for the half-year period rose 44 percent as market share recovered in addition to continued stable and high cement demand from residential construction as well as government-funded infrastructure projects.
The business witnessed a strong recovery of market share following the shutdown in the prior comparative period.
The group also indicated that clinker demand exceeds production capacity with imports well managed while power supply significantly improved during the period under review.
Figures from the cement producer show that earnings before interests, taxes, depreciation and amortization (EBITDA) rose 24,6 p6 percent for the half year period.
The unit paid dividends paid R731 million or US$4 million during the period under review, compared to US$5 million during the same period last year. According to the group, a total dividend of US$7 million was declared on November 23, compared to $10 million during the financial year 2023.
An EBITDA margin of 17,3 percent was recorded for the period compared to 14,3 percent recorded during the same period last year.
The operation accounted for 40 percent of PPC Limited’s total EBITDA and 28 percent to total revenue for the period under review.
The operation recorded impairment of R53 million, which according to the group relates to the mothballing of the Jupiter milling plant to secure cost savings.
Zimbabwe to remain self-funding while continuing to return cash to the holding company in South Africa.
As at the close of the period, the Zimbabwe operation remained debt-free and had unrestricted cash holdings of R226 million up from R118 million at 31 March 2023. Some 99,5 percent of PPC Zimbabwe’s cash is held in hard currencies.
According to the group, the current period is positively impacted by the unwinding of deferred tax due to the change in functional currency.
“The prior period rate was negatively impacted by the once-off de-recognition of a deferred tax asset in PPC Limited and the impact of PPC Zimbabwe inflation,” said the group.
Following a strong recovery in market share and profitability in PPC Zimbabwe in the current period, the company anticipates at least maintaining these gains. Further improvements will become possible following the implementation of the fly ash project, which is still in the procurement stage.-chronicle
