South Africa’s PPC Ltd has released its audited preliminary report for the year ended 30 September 2013.
- Group revenue reached R8316 million, representing an increase of 13% y/y. This was driven by rising cement sales in Zimbabwe and South Africa, the consolidation of Cimerwa in Rwanda, as well as the depreciation of the Rand against the US Dollar and Botswana Pula.
- Total cement sales volumes grew by 7% y/y.
- Normalised EBITDA came in at R2504 million, up 8% from R2327 million in the corresponding period in 2012. However, the EBITDA margin fell from 31.7% to 30.1% as a result of higher costs, such as administration and operating expenses.
Cement sales volumes in South Africa increased by 7% y/y for the year ending 30 September 2013. On a regional level, demand for cement grew in coastal areas, Gauteng and inland. However, the impact of cement imports is beginning to be felt in the Eastern and Western Cape. Imported cement fulfilled around 7.6% of South African demand in 1H13.
PPC’s average cement prices rose by 4% per t during the financial year. R/t of cement costs were up 6% but a fall in coal and maintenance costs helped to contain this rise. At the Slurry plant, the Group’s largest mill – finish mill 4 – was upgraded in May 2013. This R100 million investment has enhanced reliability and production output, in addition to lowering energy consumption by 15%.
In Zimbabwe, retail demand helped the company to record double-digit growth in cement sales. Fewer government infrastructure projects in Botswana led to lower cement demand from the construction and industrial sectors. This hit PPC Ltd’s cement sales volumes. According to the company’s report, private projects in Gaborone are picking up pace, which will help to boost demand going forward.
Exports from Zimbabwe to the Tete region improved. The company plans to install a bulk handling facility in Zimbabwe to further enhance efficiency. However, flood damage to the railway line between South Africa and Maputo caused logistical difficulties, which had a negative impact on exports to Mozambique.
Lime and aggregates
Sales of burnt product and limestone fell by 8% and 15%, respectively. PPC Ltd’s principle customers experienced operational interruptions, which affected lime sales levels. As a result, EBITDA dropped by 14% y/y.
However, aggregates revenue was up 12% y/y to R335 million, as growth in Botswana helped to mitigate falling sales volumes in South Africa.
Expansion and acquisitions
In South Africa, PPC Ltd purchased a majority share in Safika Cement Holdings, which has an annual capacity of more than 20 million bags of cement. This acquisition is subject to approval from the relevant authorities. Expansion elsewhere in Africa included the acquisition of a majority stake in Cimerwa Ltd, Rwanda, and increased its holding in Habesha Cement Company, Ethiopia. In the Democratic Republic of Congo, the company is investing in a greenfield project, with construction work due to commence in 1Q14.
Adapted from press release by Louise Fordham
Read the article online at: https://www.worldcement.com/africa-middle-east/19112013/ppc_ltd_results_year_ended_30_september_2013_435/