PPC on the road to recovery

PPC is on the mend following a challenging year for the company, which has been affected by cheap cement imports in South Africa, poor economic growth and muted government spending on infrastructure.

PPC released its results for the six months through September 2023 today, which revealed stronger results for the company. 

The company’s revenue increased by 20.9% to R6.17 billion, driven by a 4% increase in group cement volumes, price increases and the rand depreciation against the US dollar.

EBITDA increased by 46.8% to R1.07 billion as the company’s margins expanded in all its markets except Rwanda. 

In addition, there was a significant recovery of market share in Zimbabwe as well as a return to profitability by the overall materials business.

In the six-month period, PPC Zimbabwe adopted the US dollar as its functional currency.

This saw the company’s fair value and foreign exchange gains decrease from R82 million to R4 million as it eliminated foreign exchange gains on monetary items held in Zimbabwe. 

PPC’s profit after tax was R431 million – a significant increase from the R22 million reported last year. 

This profit growth was aided by the company’s effective tax rate decreasing to 23% compared to 79% in 2022. 

The 2022 rate was negatively affected by a once-off de-recognition of a deferred tax asset in PPC and the impact of PPC Zimbabwe inflation.

The company’s earnings per share increased to 24 cents compared to a 3 cents loss in 2022, while headline earnings per share recovered to 26 cents from a 5 cents loss.

PPC’s net debt declined to R381 million from R677 million due to strong cash generation, with cash balances remaining relatively high at R640 million.

CEO Roland van Wijnen said these results reflect “an encouraging recovery for the PPC group, albeit off a low base”.

“A key driver is that profitability shows improvement across our core southern African markets, despite the weak macro environment and decline in cement volumes in South Africa,” he said.