South African cement producer, PPC, has reduced its forecast capital expenditure for 2018 – 2020. The company is currently in merger talks with rival Afrisam, with other companies said to be interested in a possible takeover.
According to an investor presentation posted to the PPC website, capital expenditure will total ZAR2.29 billion – 3.1 billion over the three year period. The original forecast was for the spending of ZAR2.65 billion – 3.3 billion.
Most of the spending will be focused on the current project to install a new kiln line at its Slurry plant in South Africa, where spending will total ZAR1.9 billion – 2.4 billion. Spending in the rest of Africa will be mainly for maintenance and total ZAR400 million – 700 million.
In the last financial year, PPC reported cement revenues up to ZAR5.7 billion in southern Africa and ZAR2.1 billion from its rest-of-Africa operations.
The cut to capital expenditure comes as its shareholders consider a merger proposal from Afrisam, which the company says is undervalued, and may be an attempt by PPC to quell some criticism by analysts of its liquidity position.
Read the article online at: https://www.worldcement.com/africa-middle-east/13092017/ppc-cuts-capex-forecast/