- Group EBITDA plummeted by 23% to R728 million
- Group net debt reduced to R677 million
- PPC Zimbabwe’s volumes declined period-on-period by 13%
Harare- Despite challenging trading conditions in its primary cement markets of South Africa and Botswana, Pretoria Portland Company (PPC), delivered sound cash generation and deleveraged the balance sheet according to its CEO, Roland van Wijnen. This was partially offset by favorable trading conditions in its operations in Zimbabwe and Rwanda (CIMERWA).
Sales price increases on the cement markets in South Africa and Botswana were kept to a maximum of 5% throughout the time period under consideration, according to the trading statement and operational report for the six months ending 30 September 2022. Cement sales volumes were slightly lower overall by 2.6% as difficult trading conditions in the interior region offset increases in sales volumes due to greater demand and a drop in imports in the inland zone.
Volumes at CIMERWA climbed by 11%, and EBITDA increased by 63% to R249 million (from R153 million in September 2021), with period-on-period margins increasing from 28.4% to 32.3%. CIMERWA also reduced its debt and finished the current quarter with R345 million in cash on hand.
PPC Zimbabwe's volumes decreased period-on-period by 13% due to the planned kiln shutdown in the first quarter, and margins were negatively impacted by the use of imported clinker, primarily from PPC South Africa, and increased maintenance costs, despite strong cement demand from residential construction and government-funded infrastructure projects. The second quarter of the present period saw a rise in volumes when compared to the first.
The hyperinflation accounting has a significant impact on the reported results, with reported EBITDA falling 48% to R148 million (September 2021: R287 million) and margins falling from 23.2% to 17.3%.
The aforementioned issues had an effect on the group's operations, causing group EBITDA to decrease by 23% to R728 million (September 2021: R945 million).
The organization predicts that PPC South Africa will profit from a rise in cement demand since it has more capacity available to meet an increase in demand without incurring additional capital costs. PPC Zimbabwe predicts a turnaround for the remainder of the fiscal year, and CIMERWA's prospects are still promising.
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