Iconic South African company going from zero to hero 

South African cement giant PPC has made immense progress in improving the efficiency of its operations, resulting in a strong financial performance despite a lack of economic growth in the country. 

The company more than doubled its headline earnings per share in the past financial year to 40 cents per share and nearly tripled its profit. 

This was revealed in PPC’s financial results for the year ended 31 March 2025, which showed that the company’s turnaround strategy is beginning to bear fruit. 

PPC has come under pressure in recent years as a stagnant South African economy has resulted in minimal growth in demand for its products. 

As government spending on infrastructure declined, and the private sector became increasingly hesitant to invest in the local economy, demand effectively dried up for construction material. 

To mitigate this, the company has begun implementing plans to make its operations more efficient and drive better financial outcomes despite lacklustre demand. 

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

The past financial year exemplifies this strategy. PPC’s revenue declined by 1.9% to R9.8 billion as cement volumes in South Africa and Botswana decreased by 2.3%. 

However, due to efforts to improve the company’s efficiency, headline earnings per share more than doubled to 40 cents per share, and its net margin improved by over 13 percentage points. 

This enabled the company to increase its dividend to 17.6 cents per share and has given it room to invest R3 billion in building a new facility in the Western Cape. 

This facility is the next step on PPC’s financial journey, with it constructing a state-of-the-art integrated plant in the Western Cape. 

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. 

This project is central to PPC’s strategy to become less reliant on South Africa’s economic performance for improved financial performance. 

“Underpinning our strategy are clear financial metrics, namely, consistent growth in the EBITDA margin and return on invested capital (ROIC),” PPC said.  

The past financial year was initially “year zero” of its turnaround strategy, but the combined effect of closing the gaps and accelerating the turnaround has delivered substantial results ahead of schedule. 

Notwithstanding the current year’s significant margin and cash flow improvements, opportunities remain to unlock additional value. 

Incremental improvements are anticipated in the financial years FY26 and FY27 from the turnaround efforts.