PPC projects 20% dip in profit in FY20 on turbulent economic environment and Covid-19 induced uncertainties

  • Basic and headlines earnings per share to drop by more than 20%
  • Cement operations ramped up in May 2020
  • Demand recovery strong in June 2020

Harare – Dual listed regional cement manufacturer Pretoria Portland Cement (PPC) is anticipating a dip in profit for the year period ended 31 March 2020.

In an operational update PPC said, “Basic earnings and headline earnings per share is expected to decrease more than 20% compared with the 16 cents per share and 20 cents per share achieved respectively for the prior comparable period ended 31 March 2019.”

The group said these movements are after taking into account impairments of property, plant and equipment, expected credit losses and other fair value adjustments.

Commenting on the turbulent economic environment and the uncertainties birthed by the Coronavirus the group said both will have a material impact on these adjustments which are being finalised therefore PPC will provide further guidance once reasonable certainty has been established on the range.

PPC expects to publish its financial results for the year ended 31 March 2020 on or about 31 August 2020.

Nevertheless, in a trading statement for the period between May to June 2020,  the group said its cement operations ramped up in May 2020 post the lifting of the COVID-19 restrictions imposed at the end of March 2020 across most of the jurisdictions in which the group operates.

In May 2020, South Africa cement sales volumes were around 30 to 35% below May 2019 as the operations gradually resumed while in PPC International sales volumes were less than 5% below the same period in 2019, mainly driven by strong sales volumes in Rwanda.

The group added that the demand recovery was strong in June 2020 as the cement sales volumes in South Africa grew by dibble digits compared to June 2019.

The recovery was mostly driven by the absence of imports that has given an opportunity for local producers like South Africa PPC to grow.

Likewise, cement sales in PPC International also show a year-on-year growth in the month of June 2020.

PPC added that, “On the back of the improved sales volumes and the various cost and cash preservation measures, the cash flows for the last two months have shown a positive trajectory.”

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