PPC reports 9% revenue rise

PPC has published its unaudited results for the half-year ended 31 March 2015.

Group highlights

• Revenue totalled R4.5 billion, up 9% on the corresponding period in 2014 when revenue of R4.2 billion was achieved.
• During the period, 28% of the group’s revenue was generated outside of South Africa.
• EBITDA declined by 4% to R1.1 billion.
• Operating profit fell by 11%, excluding the impact of empowerment transaction IFRS 2 charges and restructuring costs. The decrease has been attributed to a lower performance by PPC’s South African cement business. 
• The group’s cement revenue grew by 4% from R3.6 billion to R3.75 billion.
• For the group’s cement division, EBITDA dropped by 10% to R988 million and the EBITDA margin decreased from 30% to 26%.
• PPC’s lime business experienced a 10% rise in revenue and a 13% increase in EBITDA, boosted by higher volumes and cost saving initiatives.
• The group’s aggregates and ready-mix division reported revenue of R463 million, due to the consolidation of Pronto Readymix from July 2014. EBITDA grew from R12 million to R57 million.

Regional results

• South Africa: sales volumes increased by 4%. However, if Safika cement is excluded then volumes in the core business fell by 3% and selling prices were down by 2%. This has been attributed to poor economic growth, increased cement imports and local competition. Despite cost savings on coal, fuel and packaging, there was expenditure on power, maintenance and internal transport. EBITDA in PPC’s core South African business decreased by 17%.
• Zimbabwe: volumes were up by 9%, although local price increases remained muted. EBITDA increased by 4% in US dollar terms as a result of good cost control measures. Export volumes declined due to exchange rate pressures and the completion of projects being supplied in the corresponding period in 2014.
• Botswana: sales volumes grew by 20%, while selling prices and cost of sales decreased. Margins improved by 20%, aided by cost reductions and higher volumes.
• Mozambique: the market in southern Mozambique is being supplied by cement from South Africa after the Maputo office was relocated to Tete. PPC’s Zimbabwe plant is supplying the market in Tete.
• Rwanda: both local and export sales volumes increased. Selling prices rose by 3%/t.

“PPC’s group cement sales volumes rose by 5% above last year, with strong demand growth in our African businesses offsetting lower demand in our core South African business,” said Darryll Castle, CEO. “Our recently acquired businesses, Safika Cement and Pronto Readymix, have continued to contribute positively to group results. Our new 600 000 tpy cement plant in Rwanda will begin to make a meaningful contribution to our results in the second half of 2015. The delivery of the expansion projects remains a critical focus while the execution of the business plans is now of paramount importance. We have identified R400 million worth of sustainable profit improvement on our existing portfolio of assets.”

Adapted from press release by Louise Fordham

Read the article online at: https://www.worldcement.com/africa-middle-east/19052015/ppc-unaudited-half-year-2015-results-released-864/