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Oliver Kazunga, Senior Business Reporter
CEMENT manufacturing group, Pretoria Portland Cement (PPC), says its Zimbabwean unit posted an improved profitability in the half-year ended September 30, 2018 despite the prevailing liquidity constraints in the economy.

The South African headquartered group, which is also listed on the Johannesburg Stock Exchange, said during the period under review it recorded resilient results against a challenging South African environment with revenue amounting to R5,6 billion up from R5,2 billion in the corresponding period last year.

Operating profit for the period amounted to R0,5 billion compared to R0,76 billion.

In a commentary overview accompanying the company’s financial results for the period under review, the group’s chief executive officer, Mr Johan Claassen, said:

“PPC has produced resilient results against a challenging South African environment. Our diversified portfolio has enabled the group to offset weaker South African performance with robust growth in our rest of Africa (RoA) segment.”

“In RoA, Zimbabwe delivered improved profitability against the backdrop of liquidity constraints,” he said.

Mr Claassen said in South Africa, a subdued consumer environment, depressed construction market and higher fuel costs negatively impacted their cement and materials results for the period.

“We will implement price increases to achieve sustainable returns in excess of the group’s cost of capital.”

The DRC (Democratic Republic of Congo) business contributed to both revenue and EBITDA (Earnings before interest, tax, depreciation and amortisation) in a market with muted growth and overcapacity.

In Rwanda, he said, the group saw the benefits of the planned plant upgrade in the second quarter of the period, with record volumes being achieved in September.

“Pleasingly, we continue to generate positive free cash flow, with debt and liquidity positions within targeted levels, albeit higher due to rand/dollar exchange rate weakness. We continue to execute on our strategic priorities in order to drive operational efficiencies and maintain our sustainable competitive advantage in the markets that we operate in,” said Mr Claassen.

On the outlook, he said, the difficult trading conditions in South Africa were expected to persist in the second half of the financial year. The industry requires real cement price increases to recover operational cost increases.

“PPC will remain focused on implementing price increases to achieve sustainable returns in excess of the group’s cost of capital, executing cost savings initiatives,” Mr Claassen said.

— @okazunga