• Revenue increased by 34%

  • Sales volumes improved by 28%

  • EBITDA declined by 18.3%

Pretoria Portland Cement (PPC) Zimbabwe registered a 34% increase in revenue to R2 172 million for the year ended 31 March 2022 compared to R1 623 million recorded in the prior year buoyed by increased cement sales volumes.

In a statement accompanying the Group’s financial results, PPC Limited, the holding group of PPC Zimbabwe said cement sales volumes increased by 28% year on year due to retail demand and support from government-funded projects.

“PPC Zimbabwe adjusted selling prices in local currency and US Dollar to reflect currency depreciation and input cost inflation respectively,” the Group said.

However, earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the year declined by 18.3% to R393 million from R481 million in 2021 with a reduced EBITDA margin of 18.1%.

“PPC Zimbabwe incurred additional costs in importing clinker to support volume growth and offset the impact of a planned and unplanned kiln shut down during the period. The importation of clinker, higher maintenance costs and the depreciation of the ZWL dollar against the ZAR negatively impacted EBITDA,” the Group said.

During the year under review, the Reserve Bank of Zimbabwe honoured its obligation to settle PPC Zimbabwe’s legacy debt which was repaid fully in December 2021.

The Group highlighted that PPC Zimbabwe is financially self-sufficient and is focused on cash preservation and maximising US$ EBITDA.

Meanwhile, PPC Limited’s revenue for the year increased by 11%to R9 882 million compared to R8 938 million recorded in 2021. Excluding Zimbabwe, Group revenue increased by 5%.

Total costs, being the cost of sales together with administration and other operating expenditure, increased by 19% to R9 360 million from R7 887 million last year with it being significantly affected by an increase in PPC Zimbabwe's costs of 85% while costs excluding Zimbabwe increased by 7%.

“Other than continuing hyperinflation and the 42% depreciation of the Zimbabwean dollar (ZWL dollar) against the South African rand (ZAR), the most significant line item was an increase in PPC Zimbabwe's depreciation expense to R386 million (March 2021: R24 million) due to the application of the effective rate method of hyperinflating depreciation in the current year,” the Group said.

The Group’s earnings per share (EPS) for the period from continuing operations decreased to a loss of 5 cents from 65 cents in 2021 while headline earnings per share from continuing operations (HEPS) reduced to a loss of 3 cents from 3 cents profit last year.

PPC Limited’s earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 7% to R1 493 million from R1 598 million in the prior year with an EBITDA margin of 15,1% compared to 17,9% in 2021.

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