PPC Ltd has today announced its reviewed provisional results for the six month period to 31 March 2016, after the Board approved the change of financial year end from 30 September to 31 March.
Group EBITDA was up 2% to R1,1 billion. The Profit Improvement Programme (PIP), which aimed to deliver R400 million by 2017, generated R178 million for the period after providing R212 million by September 2015.
PPC’s total cement sales volumes for the six-month reporting period were 1% below the previous year. In South Africa, cement volumes were up by 1%. While revenue in the lime business declined 12%, aggregates and readymix operations contributed positively to group revenue. CIMERWA achieved sales volumes of 124 000 t at the expected EBITDA margin, adding nearly R200 million to group revenue for the reporting period to 31 March 2016.
Group cost of sales were only 2% higher following the inclusion of CIMERWA in Rwanda. Cost of sales in the South African cement business was down 3%, on a per ton basis, while administration and overhead costs fell 12% for the period.
Projects in the DRC, Zimbabwe and Ethiopia are all over 70% complete and due to be commissioned in the next year with ramp up to the required production capacity to take approximately 3 yrs.
Darryll Castle, CEO of PPC, commented: “We are pleased with the cost savings achieved across the business during this period. We have a deliberate approach to navigating the current economic landscape by driving cost efficiencies and leveraging our capabilities to achieve operational excellence.”
“Our strategy to expand into a diverse pan-African player is starting to bear fruit as evidenced by CIMERWA’s positive contribution to group revenue. The three African expansion projects to be commissioned in the next 12 months will provide us with the necessary headroom to cushion us against macroeconomic movements and operational risks including increasing competition.”
To enable PPC to effectively execute its new strategy, a few changes have been made to the group’s operating architecture. PPC Aggregates, Pronto Readymix, Ulula Ash and PPC Lime have been consolidated into a materials business and a new commercial division with a dedicated project management office has been introduced.
The materials business division has made good progress.
“PPC is fundamentally strong and profitable with a solid operating base. We have a deliberate approach to navigate the current economic landscape by driving cost efficiencies; leveraging our capabilities to achieve operational excellence and completing our sizeable projects.
“With a view to the long term, we are equally deliberate about getting the company futureready to partner with and enable economies across Africa achieve their growth imperatives,” added Castle.
PPC seeks to raise between R3 billion and R4 billion by way of a proposed rights issue to improve liquidity and alleviate constraints.
“We identified the need to raise capital in the latter half of 2015 and were far advanced with an orderly capital raise process which was interrupted by the sudden and severe ratings action taken by S&P two weeks ago.
“The ratings downgrade meant that we needed to accelerate the capital raise and increase the quantum to ensure that we can pay down the required debt and strengthen the balance sheet.
“A de-geared balance sheet will allow us more flexibility to absorb any further weakness in the operating environment and give us the ability to pursue our corporate strategy which is to be a world class provider of materials and solutions with a view to doubling the business every 10 years,” concluded Castle.
Edited from press release by Angharad Lock
Read the article online at: https://www.worldcement.com/africa-middle-east/15062016/ppc-publishes-financial-results-279/