PPC Zim records increased first half sales and earnings despite economic challenges

Author Name
Respect Gwenzi
Stock Market 4 months ago

Harare – Regional cement manufacturer, Pretoria Portland Cement (PPC) says 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% to 10% in the first half of its 2021 financial year supported by ongoing infrastructure projects.

Headquartered in South Africa, PPC also has operations in Botswana, Ethiopia, Democratic Republic of Congo (DRC) and Rwanda.

During the period under review, PPC Zimbabwe cement sales grew in the similar range, supported by an increase in volumes of 35% to 40% in Q2 with the Group highlighting that the positive sales momentum has continued into October and November, albeit at a normalised rate.

Revenue increased by 60% to R797 million compared to R497 million recorded in the same period last year. 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 against R201 million in prior year and EBITDA margins improved to 40.9%, versus 40.4% in September 2019.

The Group further highlighted that the Zimbabwe unit continues to meet its debt obligations.

Overall, Group revenue increased by 1% to R5 006 million (September 2019: R4 948 million) attributed to robust cement sales, post the easing of COVID-19 restrictions across the jurisdictions in which the Group operates. Group EBITDA increased to R996 million from R868 million recorded in the same period last year.

Commenting on the Group performance, Chief executive officer (CEO) Roland van Wijnen said, “After a difficult start to the financial year as a result of the COVID-19-related trading restrictions across the jurisdictions in which we operate, I am pleased that we are once again able to serve our customers and play our part in keeping the economy going. My gratitude goes to my colleagues who have been working diligently to keep our operations running while observing stringent health and safety protocols. Our business has benefited 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.”

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