• PPC's revenue surged 20.6% to R10,058 million, with Zimbabwe operations delivering 90.9% growth
  • Zimbabwe remained debt-free with R40 million in unrestricted cash holdings
  • Zimbabwe cement sales volumes jumped 36.6%

Harare- Pretoria Portland Cement (PPC) has reported a robust group performance for the full year 2023, driven primarily by strong results from its Zimbabwean operations.

Cement consumption in Zimbabwe has been rising in recent years, particularly since 2017 under the infrastructure developments initiated by President Mnangagwa's administration.

Consumption has increased from below 1 million tonnes in 2017 to around 1.6 million tonnes in 2023.

Meanwhile, Zimbabwe's countrywide housing shortage is estimated at 1,25 million units, translating to a national backlog of five million citizens, or over 40 percent of the total population.

As such, more than 1.2 million Zimbabweans remain on the government’s national housing waiting list. Government is targeting to construct 1 million houses by 2025 with an initial projection of 200 000 in 2023.

As a result of this, the group’s revenue for the year rose 20.6% to R10,058 million, up from R8,339 million in the previous year. This was driven largely by a strong performance in PPC's Zimbabwean business.

“Zimbabwe remains debt-free and had unrestricted cash holdings at 31 March 2024 of R40 million (FY23: R118 million),” PPC chief executive officer, Matias Cardarelli said in a statement accompanying the FY financials.

In South Africa and Botswana, cement revenues increased only marginally by 5.2%, as price increases and higher sales of clinker to Zimbabwe helped offset declining cement sales volumes. The company's materials businesses saw revenue decline by 6.0% compared to the prior year.

PPC's trading profit increased by R502 million to R619 million, with R395 million of this increase attributable to the Zimbabwean operations. Additionally, the group's depreciation costs decreased by R155 million to R623 million.

PPC's Zimbabwean operations delivered a strong recovery in the current year, after being impacted by an extended kiln maintenance shutdown in the prior year. The business regained market share, benefiting from demand across both residential construction and government-funded infrastructure projects.

Cement sales volumes in Zimbabwe increased 36.6% compared to the prior year, although growth has softened as the strong base from the second half of the previous fiscal year comes into effect. Revenue for the Zimbabwean business increased by 90.9% in rand terms to R3,346 million, driven by the higher volumes and price increases.

EBITDA margins in Zimbabwe reduced marginally to 20.2% for the full year, down from 20.8% in the prior year, due to higher electricity costs resulting from tariff increases. Clinker purchases also continued in the second half and were 169% higher than the previous year.

Due to the improved performance, PPC paid dividends of US$11 million during the year, up from US$10 million in the prior year.

PPC remains the leading cement producer in Zimbabwe, with a capacity of 1.4 million tonnes per year at its facilities in Harare and Bulawayo. The company controls over 60% of the cement market, according to industry estimates, with Khayah Cement being the second-largest producer with around 16% market share.

However, production costs and plant breakdowns are limiting the industry's ability to meet the growing demand.

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