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PPC reports 2H15 and FY15 results

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World Cement,

South Africa’s PPC has reported a 23% increase in net profit for 2H15, a significant improvement on the 45% decline in 1H15. Through its Profit Improvement Programme, the group achieved gains of R212 million. The initial target was R400 million over three years, showing that the company is making excellent progress on this front. Cash generation from operations was up 5% to R2.7 billion, while overheads were down 1% for the full year on a like-for-like basis.

In FY15, revenue was up 2% y/y and EBITDA was more or less on par with FY14. The cost of sales grew by 3% over the year, which ended 30 September 2015. Cement sales volumes for the year were more than 5.3 million t, a 2% decline y/y, while sales of aggregates dropped 5%, but sales of ready-mix concrete and lime grew. Debt increased 35% y/y

In an interview with MoneyWeb, PPC CEO Darryll Castle said that the company’s results were impacted by the sluggish South African economy and that PPC is growing its business in the rest of Africa. He noted that the second half of the year proved more robust than the first half, but admitted that competition both from new entrants to the market and imports has put pressure on pricing. Castle said that despite import duties, the imports keep coming. He said that PPC tracks shipments and runs promotions when imports are coming in, in order to make life difficult for importers.

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