PPC pays US$4m dividend
Nqobile Bhebhe, [email protected]
LEADING cement producer, Pretoria Portland Cement (PPC), says its Zimbabwean unit posted a strong recovery and managed to win back the market share it had lost during the planned extended kiln shutdown in the first half of 2022 resulting in 104 percent revenue increase.
In the six months ended 30 September, the entity saw a strong recovery across all key metrics when compared to the negative impact of the planned shutdown in the prior comparative period.
PPC Zimbabwe continues to declare and pay dividends.
For instance, a dividend of US$4 million was paid.
A further dividend of US$7 million was declared by PPC Zimbabwe in November 2023.
“During the current reporting period, PPC’s operation in Zimbabwe saw a strong recovery in all its key metrics. Zimbabwe continued to win back market share it had lost during the planned extended kiln shutdown in the first half of the prior year,” reads part of the results.
The strong recovery follows the impact of the planned extended kiln shutdown in the prior comparative period.
Following a strong recovery in market share and profitability in PPC Zimbabwe in the current period, the company anticipates at least maintaining these gains. Further improvements will become possible following the implementation of the fly ash project, which is still in the procurement stage.
Revenue up 104 percent to R1 743 million (H1 FY23: R855 million) and EBITDA margins increased to 24,6 percent (H1 FY23: 17,3 percent).
In addition, there was a significant recovery of market share in Zimbabwe as well as a return to profitability by the overall materials business.
“Fair value and foreign exchange gains decreased from R82 million to R4 million due to the adoption of the US$ as the functional currency for PPC Zimbabwe, thereby eliminating foreign exchange gains on monetary items held in Zimbabwe.
The firm said Zimbabwe remained debt-free and had unrestricted cash holdings at 30 September 2023 of R226 million up from R118 million at 31 March 2023 (September 2022: R253 million).
Some 99,5 percent of PPC Zimbabwe’s cash is held in hard currencies. Zimbabwe declared and paid a US$4 million dividend during the current period and declared a further US$7 million dividend in November 2023.
Cement sales volumes increased 44 percent mainly due to improved clinker availability for production, increased local demand, a reduction in imports and a soft base in the prior comparative numbers due to the extended shutdown.
PPC Zimbabwe changed its functional currency to US$ and reporting has therefore been simplified as hyperinflation accounting is no longer applicable.
The rand depreciated by 14,9 percent to the US$ when compared to the prior comparative period, bolstering the Zimbabwean overall performance when reported in South African rands.
Revenue for the current period increased by 104 percent in rand terms to R1 743 million (September 2022: R855 million) which, together with the focus on costs resulted in EBITDA margins increasing to 24,6 percent (September 2022: 17,3 percent).
PPC Zimbabwe’s EBITDA increased by 190 percent to R429 million (September 2022: R148 million).