Government infrastructure drive boosts PPC revenues

PPC Claims Cement Shortage was Caused By Annual Maintanance At Its Plants The country’s largest cement manufacturer, PPC Zimbabwe, has said the market has no reason to engage in panic buying of cement and advised retailers to act responsibly in pricing the commodity to avoid distorting the market. Managing director, Mr Kelibone Masiyane, said the perceived shortage was temporary and attributed this to an

Government infrastructure drive boosts PPC revenues

A government infrastructure drive in the past year drove Pretoria Portland Cement (PPC) Zimbabwe’s sales volumes by 28 percent in the full year to March 31, 2022.

PPC Limited in its results said; “Although trading conditions remain challenging in Zimbabwe, owing to the macroeconomic environment, it continues to trade ahead of expectations. In the year under review, cement sales volumes for PPC in the country increased by 28 percent year-on-year.”

Revenue from PPC Zimbabwe increased by 34 percent year-on-year to R2,1 billion, owing to buoyant retail demand and support from government-funded projects.

Overall, the group’s profit before tax from continuing operations decreased from R1,7 billion to R186 million and excluding the noncash items mentioned, operating profit from continuing operations would have decreased by R43 million in the year under review.

The group taxation charge for the reporting year amounted to R207 million.

Cash generated from continuing operations before working capital changes decreased by 3 percent to R1,5 billion, while stringent working capital management resulted in cash generated from continuing operations increasing by 6 percent year-on-year to R1,4 billion.

Total costs, being the cost of sales together with administration and other operating expenditure, increased by 19 percent to R9 360 million from R7 887 million last year with it being significantly affected by an increase in PPC Zimbabwe’s costs of 85 percent while costs excluding Zimbabwe increased by 7 percent.

“Other than continuing hyperinflation and the 42 percent depreciation of the Zimbabwean dollar against the South African rand (ZAR), the most significant line item was an increase in PPC Zimbabwe’s depreciation expense to R386 million (March 2021: R24 million) due to the application of the effective rate method of hyper inflating depreciation in the current year,” the Group said.

Net cash outflow from investing activities reduced to R72 million in the year under review, compared with R392 million in the prior financial year, mainly owing to the receipt of R503 million in cash from the disposal of PPC Lime and Botswana Aggregates offsetting an increase in investments in property, plant and equipment of R186 million.

As a result, its debt now stands at R1 billion.

Chief finance officer, Brenda Berlin, said in a June 27 statement that the company’s ongoing efforts to prudently manage cash and debt had placed it in a robust financial position to navigate all economic cycles.

CEO Roland van Wijnen told Engineering News that the company was focused on resuming dividends as soon as possible, while also further driving efficiencies to help mitigate inflationary pressures.

In unpacking the main negative impacts to the company’s earnings per share (EPS), which amounted to a loss of R5c for the year under review, compared with EPS of R3c in the prior financial year, he explained that PPC Zimbabwe incurred a loss before tax of R67 million and that impairments totalled R38 million.

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