One of South Africa’s oldest companies going from zero to hero

PPC’s turnaround continues to gain momentum, with the cement-maker set to report a significant increase in earnings despite lacklustre construction activity in South Africa. 

The company revealed in a trading statement for the six months ended 30 September 2025 that its earnings per share and headline earnings per share are expected to be between 8.3% and 18.7%. 

On an adjusted basis, the increase is expected to be far greater, between 27% and 36% higher than the same period in the last financial year. 

This difference is largely due to the impact of unrealised foreign exchange losses related to outstanding contracts entered into by PPC to build out its new R3 billion cement plant in the Western Cape. 

PPC explained that it entered into these foreign exchange contracts to hedge the US dollar exposure associated with the buildout of the plant. In effect, the company’s management team is protecting its balance sheet from rand weakness.

However, the rand has strengthened significantly against the dollar so far in 2025, giving rise to unrealised foreign exchange losses on the contracts as of 30 September. 

PPC said the full details surrounding these contracts will be outlined when it presents its interim financial results on 24 November 2025. 

The company’s continued improvement of its financial performance is reflective of the increased efficiency of its operations. 

This has enabled the company to produce relatively strong results despite slow economic growth and limited construction activity. 

In the past financial year, PPC more than doubled its headline earnings per share and nearly tripled its profit, following a period of significant financial pressure on the company. 

As government spending on infrastructure declined and private companies became increasingly hesitant to invest in the local economy, demand for cement and other construction materials dried up. 

To mitigate against this, PCC began implementing plans to make its operations more efficient and drive better financial outcomes despite lacklustre demand. 

The overarching strategy was referred to by the management team as Awaken the Giant, which is beginning to bear fruit. 

This strategy also involves the construction of a new R3 billion facility in the Western Cape to produce cement, with it being a state-of-the-art integrated plant. 

The project was first announced in January 2025 and aims to further drive down PPC’s costs and make its operations more efficient. 

“The material reduction in variable costs due to the advanced technology being introduced, lower fixed costs, and efficiencies stemming from a single-site operation will ensure the plant is far more value accretive when compared to our existing plants in the Western Cape,” the company said. 

Importantly, this will be achieved without relying on market growth. The real benefit of this project is expected to start materialising in 2028. 

The plant will have the capacity for 1.5 million tons of cement annually and will supply customers in the Eastern, Northern and Western Cape provinces.