PPC Zimbabwe trading ahead of expectations despite economic challenges

  • PPC Zimbabwe’s sales volume was up 19% for the half year ended 30 September 2021
  • PPC Zimbabwe’s revenue increased to R1239 million
  • However EBITDA declined by 12%

Harare – Regional cement manufacturer, Pretoria Portland Cement (PPC) says despite the challenging macro-economic environment, PPC Zimbabwe continues to trade well and ahead of expectations as evidenced by a 19% cement sales volumes increase for the half-year ended 30 September 2021.

In a statement accompanying its half-year results, the Group said the improvement in sales volumes was due to retail demand, increased sales to concrete product manufacturers, and support from government-funded projects.

Resultantly PPC Zimbabwe’s revenue for the six months surged by 55% to R1.239 million from a comparative last year revenue of R797 million.

However, earnings before interest, taxes, depreciation and amortisation (EBITDA) declined by 12% to R287 million from R326 million in 2020 with a reduced EBITDA margin of 23% %).

“EBITDA was negatively impacted by additional costs incurred in the importation of clinker to offset the impact of a planned and unplanned kiln shut down during the period. Furthermore, the kiln shut down resulted in higher maintenance costs.

“The rand strengthened significantly by some 83% against the ZWL compared to the prior period and this negatively impacted the rand EBITDA. PPC Zimbabwe is financially self-sufficient and is focused on cash preservation and maximising US$ EBITDA given the prevailing economic conditions,” PPC said.

Meanwhile, the Group’s EBITDA for the six months increased by 13% to R945 million from R839 million recorded in the same period the prior year.

Fair value adjustments and foreign exchange movements resulted in a loss of R1 million from R369 million as the Zimbabwean dollar depreciation against the United States Dollar stood at 4% compared to 226% last year.

PPC realised a net profit on disposal of subsidiaries of R189 million from the sale of PPC Lime and PPC Botswana Aggregates during the period under review.

On the outlook, the Group will continue to take the necessary measures to mitigate the impact of input cost inflation, reduce carbon intensity, and enhance its financial resilience.

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