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PPC reports positive half-yearly results

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World Cement,

Southern African cement maker, PPC, has reported a remarkable uptick in net profits in the six months to September 2017. The company saw net profit attributable to shareholders jump 188% to ZAR294 million, as finance costs fell substantially year on year.

According to the company’s half-year results, finance costs were down to ZAR285 million, compared to ZAR509 million the year before. The fall was “due to the benefits of the rights issue and the liquidity and guarantee facility agreement fees incurred in the previous reporting period.”

The company also said it had made “significant progress” strengthening its financial profile, improving liquidity and smoothing the debt maturity profile of the business.

Southern African debt maturing in June 2018 has been restructured to a more gradual payment profile of between three and five years, while a two year capital holiday from the funders of the company’s cement plant in the Democratic Republic of Congo (DRC) will “reduce the required deficiency funding from PPC group.”

“The group has made considerable progress in negotiating its debt obligations in South Africa and the DRC, which will result in an extended debt profile and should be capable of being serviced from internal cash generation,” said PPC CEO, Johan Claassen.

Meanwhile, cash flow from operating activities was up 49% over the period as the company. “Management’s focus is firmly on delivering improved profitability and liquidity in the short term,” continued Claassen.

On the operations side, group revenue rose 1% to ZAR5.188 billion, as cement volumes increased by 2% to around 3 million t. Earnings were up 4% to ZAR1.193 billion.

The company benefitted from positive performance from its business outside of South Africa, where revenue grew by 9% on robust growth in Zimbabwe and Rwanda. This offset a slight fall in South African revenues.

Rwanda reported sales volumes up 30%, while sales in Zimbabwe grew by more than 25% - achieving a new sales record. Progress continued at the new plants in the DRC and Ethiopia, both of which are expected to be operational by the end of the financial year. Neither plant contributed to PPC’s revenues over the period.

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