Kiln maintenance slows PPC’s recovery plan
LEADING cement producer, Pretoria Portland Cement (PPC), says its Zimbabwean unit experienced slower than anticipated recovery due to the planned extended kiln shut-down for maintenance, which restricted volumes.
However, the market remains sound as it continues to generate adequate sales in foreign currency to sustain its operational requirements, said the firm.
In its consolidated financial report for the financial year ending 31 March 2023, the South Africa-headquartered firm said year-on-year volumes were down 16 percent despite robust cement demand from concrete product manufacturers.
This is attributed to the extended kiln shutdown but PPC Zimbabwe is anticipated to continue on a recovery path.
“The impact of the planned extended kiln shutdown in the first half of the year for special maintenance and the installation of the bag house and bucket elevator resulted in limited clinker production and ultimately restricted the volumes of cement sold,” the firm said.
In addition, plant stoppages due to power interruptions negatively affected performance.
“Volumes year-on-year were down 16 percent despite robust cement demand from concrete product manufacturers and Government-funded infrastructure projects.
“Government reduced the number of import licences in January 2023, which will support the recovery of PPC’s market share.
“PPC Zimbabwe was able to implement US$ price increases to recover input cost inflation,” said the company.
The report indicates that the local unit continued to generate adequate sales in foreign currency to sustain its operational requirements during the period and pay dividends.
“PPC received US$8,9 million in dividends during the year totaling R147 million net of withholding tax (compared to US$6,2 million in the prior year). Revenue decreased by 19 percent to R1 753 million (March 2022: R2 172 million),” it said.
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“EBITDA declined by seven percent to R365 million (March 2022: R393 million) in ZAR, but margins, due to price increases, increased to 20,8 percent (March 2022: 18,1 percent).”
It added that the Zimbabwe unit is debt-free and had unrestricted cash holdings as at 31 March 2023 of R118 million.
The cash balance declined from R353 million at 30 September 2022 due to a dividend of US$5 million paid in November 2022 and lower US$ balances at the year-end with the cash holdings in ZWL depreciating significantly against the rand.
Some 70 percent of PPC Zimbabwe’s cash is held in hard currencies, it noted.-chronicle
