• PPC Zimbabwe delivered a record performance in FY2026, declaring and paying US$36 million in dividends generating US$37.6 million in operating cash flow
• Zimbabwe’s construction boom drove PPC Zimbabwe’s 18.2% cement volume growth and record cash generation, while the same demand surge pushed cement imports to an all-time high
• PPC Zimbabwe’s US$36 million dividend flow funded the majority of PPC Limited’s R469 million shareholder payout and directly supported the R712 million capex

Harare- Pretoria Portland Cement Limited (PPC) has reported revenue of R10.255 billion for the year ended 31 March 2026, a 3.9% increase from R9.871 billion in the prior year, with EBITDA rising 31% to R2.079 billion and EBITDA margins expanding by 4.2 percentage points to 20.3%.

Earnings per share grew 75% to 56 cents and headline earnings per share increased 25% to 50 cents, and the group declared an ordinary dividend of 30.2 cents per share, a gross cash outlay of R469 million against R274 million in FY25.

The group’s chief executive officer, Matias Cardarelli, presenting the FY26 results said this was the second consecutive year of exceptional results from the Awaken the Giant turnaround strategy, confirmed that EBITDA has grown 67% from R1.2 billion in FY24 to R2.1 billion in FY26 and that EBITDA margins have expanded by eight percentage points from 12.3% to 20.3% over the same period.

What was once thought by many to be impossible, Cardarelli said, is being made real by the new PPC team.

PPC Zimbabwe declared and paid US$36 million in dividends during FY2026, against US$13 million in FY25. A 177% increase in dividends paid by a single operating subsidiary in a single year is a statement about the cash-generative capacity of that subsidiary at a specific moment in the economic cycle. PPC Zimbabwe is debt-free, holds 99% of its cash in hard currencies, and declared US$36 million from its operating cash flow in a year when net cash inflow before financing activities rose to US$37.6 million from US$16.8 million in the prior period.

The dividend did not come from a special transaction, an asset disposal, or a balance sheet optimisation, but  from selling cement in Zimbabwe at prices and volumes that generated US$37.6 million in operating cash after meeting all capital expenditure, maintenance, and working capital requirements.

In 2025, Zimbabwe's construction sector absorbed 18.2% more cement volume than the prior year, confirming that the demand for physical infrastructure in Zimbabwe is running ahead of what the domestic supply base can fully satisfy. The Zimbabwe cement import data validates that reading from the trade statistics side. Zimbabwe imported USD 12.02 million worth of Portland cement in April 2026 alone, the highest single monthly value from January 2021 through April 2026, at more than eight times of USD 1.46 million in January 2021. The two data sets, PPC Zimbabwe's record cash generation and Zimbabwe's record cement imports, are two readings of the same underlying construction demand signal.

The Zimbabwe Segment: The Group's Most Profitable and Most Structurally Advantaged Operation

PPC Zimbabwe delivered EBITDA of R961 million in FY2026, a record for the operation and a 13% increase from R849 million in FY25. In USD terms, EBITDA grew 19.3%. The EBITDA margin of 26.9% is marginally below the prior year's 27.2%, with the marginal compression attributable to cost dynamics in H1 before a recovery to 30.9% in H2. The 30.9% EBITDA margin achieved in H2 FY2026 demonstrates the operating leverage available to PPC Zimbabwe when its Bulawayo plant is running at full capacity and demand is absorbed without the constraint of mechanical disruption.

The Bulawayo gearbox breakdown on 3 February 2026, which affected volumes in the Bulawayo region for two months, is the specific event that compressed H2 FY2026 volume growth from the 25% year-on-year increase recorded in H1 to 12% in H2. Without the gearbox failure, PPC Zimbabwe's full-year volume growth trajectory, combined with H2 EBITDA margins of 30.9%, would have produced a result materially ahead of the R961 million actually recorded.

The turnaround initiatives that gained traction in FY2026, including a 4% increase in own clinker production through operational efficiencies, are the management interventions that improved the cost structure rather than simply benefiting from the demand environment. Own clinker production is the most capital-intensive and technically demanding component of the cement manufacturing value chain, and a 4% improvement in own clinker output reduces PPC Zimbabwe's clinker import requirement, substituting internal production for purchased input and improving the margin on every tonne of cement sold from that internally produced clinker.

Strong demand supported higher clinker imports to supplement production, confirming that even with improved own clinker production, the scale of demand in Zimbabwe's construction market exceeded PPC Zimbabwe's clinker self-sufficiency capacity and requires external sourcing.

The Zimbabwe cement imports from January 2021 to April 2026 is opened at USD 1.46 million in January 2021 and reached USD 12.02 million in April 2026, an 8.2-fold increase over 64 months that describes not a cyclical demand variation but a structural shift in Zimbabwe's construction economy.

Between January 2021 and October 2023, monthly cement imports fluctuated between USD 1.4 million and USD 7 million, with no sustained period above USD 6 million. November 2023 marked the first structural break, when imports jumped to USD 9.5 million and held above USD 9 million in December 2023, establishing a new floor level that has not been breached since.

The second phase, from January 2024 through June 2025, consolidated in the USD 5 million to USD 9.5 million range as domestic supply capacity from PPC Zimbabwe and competing producers absorbed a portion of the incremental demand.

The third phase began in July 2025, when imports reached USD 10.8 million for the first time, exceeding USD 11 million in August 2025 and December 2025 before reaching the April 2026 record of USD 12.02 million.

The 6-month rolling average, which was below USD 4 million through 2022, crossed USD 7 million in mid-2024 and has been trending above USD 9 million through the twelve months to April 2026. The structural upward direction of the rolling average eliminates any seasonal demand explanation for the April 2026 record.

Construction activity in Zimbabwe is growing at a rate that neither PPC Zimbabwe's expanded domestic production nor the combined domestic producer base can fully satisfy without recourse to imported cement.

The policy context for that demand level is traceable to three concurrent forces. The mining sector's capital expenditure cycle, confirmed by April 2026's USD 23.2 million tunnelling machinery import and the parallel surface equipment procurement, generates direct demand for construction materials in shaft infrastructure, processing plant facilities, and ancillary mining infrastructure. Government's infrastructure programme, including road rehabilitation, dam construction, and public building investment, contributes institutional demand that moves in multi-year project cycles rather than monthly variations. The private sector construction boom in Harare and Bulawayo's residential and commercial segments, reflecting the ZiG's monetary stability and the remittance-driven property market, generates the retail and commercial building segment that PPC Zimbabwe's turnaround strategy specifically targeted through its value-accretive sales mix initiatives.

The SA versus Zimbabwe Margin Story

PPC South Africa delivered EBITDA of R1.196 billion at a margin of 19.1%, excluding the R139 million property sale gain, at 16.9%. PPC Zimbabwe delivered EBITDA of R961 million at a margin of 26.9%. The South African operation generates more absolute EBITDA, reflecting its substantially larger revenue base of R6.251 billion against Zimbabwe's R3.567 billion. But the Zimbabwe operation generates a materially higher return on every rand of revenue, confirming that Zimbabwe's construction market commands pricing premiums that South Africa's more competitive and lower-growth market does not.

The implications for PPC's capital allocation framework are direct. The US$36 million dividend flow from Zimbabwe into PPC Limited's consolidated position funds a material portion of the R469 million gross dividend declared to shareholders. The specific mechanism is disclosed precisely: PPC Ltd received R490 million from PPC Zimbabwe as its share of the US$36 million dividend, of which R433 million flowed through to shareholders as the Zimbabwe component of the total dividend, with R105 million ring-fenced to secure a PPC Zimbabwe guarantee in South Africa. Approximately 92% of the total gross dividend declared to PPC Limited shareholders originated from or was enabled by PPC Zimbabwe's operating cash generation.

An investor in PPC Limited shares on the JSE is therefore substantially an investor in Zimbabwe's construction sector rather than merely a South African cement company, and the Zimbabwe segment's contribution to group cash generation in FY2026 deserves to be evaluated on that basis rather than as a subsidiary performance note embedded in the SA-centric group narrative.

The RK3 Western Cape Plant

PPC is constructing a new state-of-the-art integrated cement plant in the Western Cape, designated RK3, at a board-approved total cost of R3.1 billion with construction expected to complete in the last quarter of FY27. Capital expenditure on RK3 incurred during FY2026 was R712 million, funded partly through a trade facility loan of R48 million secured against letters of credit to Sinoma Overseas Development Co. Ltd, which is the Chinese engineering contractor constructing the plant. Foreign exchange risk on the US$134 million Sinoma contract has been fully hedged through forward exchange contracts. The rand's 5.2% strengthening against the US dollar during FY2026 produced unrealised and realised FEC losses of R148 million, which explain the divergence between reported EPS of 56 cents and pro forma EPS of 64 cents after adjusting for those losses.

The RK3 investment is the most consequential capital allocation decision in PPC's medium-term strategic framework, and its funding relationship to PPC Zimbabwe's dividend generosity is direct. The SA and Botswana group received R490 million from PPC Zimbabwe in FY2026 dividends. It deployed R712 million in RK3 capital expenditure. Without the Zimbabwe dividend inflow, the SA and Botswana group would have required either higher external borrowings, reduced RK3 progress, or a materially smaller shareholder dividend to maintain its conservative gearing position.

The circle connects precisely: Zimbabwe's construction boom is generating the cash that is funding the Western Cape capacity expansion that will drive PPC's next step-change in earnings in FY28.

What the Record April Cement Imports Mean for Zimbabwe's Construction Economy

April 2026's USD 12.02 million cement import record, occurring in the same month as record diesel imports, record tunnelling machinery imports, and a PPC Zimbabwe operation posting 18.2% volume growth and US$37.6 million in operating cash generation, describes a construction economy operating at a scale and intensity that its domestic supply infrastructure has not yet caught up with.

That statement is the analytical conclusion from four data streams converging in the same month. PPC Zimbabwe generated US$37.6 million in operating cash while simultaneously running short of clinker self-sufficiency. The broader Zimbabwe cement import bill reached a 64-month record of USD 12.02 million from producers outside PPC Zimbabwe's supply chain. The mining sector deployed USD 23.2 million of underground development equipment requiring concrete shaft linings, processing plant foundations, and surface infrastructure, and the diesel import record of USD 132.5 million confirmed that construction, mining, and infrastructure activity are consuming energy at a pace consistent with a construction economy running well above its long-run trend rate.

The import data represents the arithmetic gap between a construction market expanding at 18.2% annually and the combined clinker and finished cement capacity of all domestic producers. PPC Zimbabwe's 4% own clinker production improvement and its volume growth of 25% year-on-year in H1 FY2026 are the supply side responses to that demand gap. They are not yet sufficient, however, to close the import gap, and the trajectory of the rolling average cement imports, crossing USD 9 million per month through the twelve months to April 2026, suggests the gap is not closing without additional domestic capacity investment.

PPC Zimbabwe does not operate in Zimbabwe's cement market uncontested. Sino Zimbabwe Cement and Circle Cement both supply the Harare and Bulawayo construction markets from domestic production bases, and the imported cement that Zimbabwe's trade data records arrives from producers across the region including South Africa, Zambia, and Mozambique. The import penetration that the April 2026 record confirms is therefore not entirely an incremental demand signal.

Some portion of the import volume represents market share captured from domestic producers by competitive pricing from regional suppliers, particularly in the border trading zones of Mutare, Beitbridge, and Chirundu where landed cost from regional producers can approach or undercut domestic producer pricing depending on exchange rate dynamics and transport logistics.

PPC Zimbabwe's structural competitive advantage against regional import competition is the cost structure of a fully integrated cement producer with a 132-year operating history in Zimbabwe, whose fixed cost absorption at high volumes produces the unit economics that imported cement cannot match when transport and duty costs are properly accounted for.

The strategic risk to that position is not current import competition but future capacity entry. Zimbabwe's construction demand trajectory, confirmed by both PPC Zimbabwe's record cash generation and the imports’ al upward shift, is the most compelling demand signal available to a greenfield cement investor evaluating southern Africa's growth markets. PPC Zimbabwe's sustainable competitive advantage against that entry risk is the combination of its established distribution network, its brand equity in Zimbabwe's building trade, its clinker self-sufficiency improvement programme, and its operational flexibility to serve both the formal construction sector and the informal building market that constitutes a substantial portion of Zimbabwe's residential construction activity.

The single mechanical failure on 3 February 2026 that disrupted the Bulawayo plant for two months provides the most important forward-looking signal in PPC Zimbabwe's FY2026 results.

The FY2027 baseline for PPC Zimbabwe therefore includes a volume recovery component that requires no demand improvement from the current level to materialise. If the Bulawayo plant operates without comparable mechanical disruption in FY2027 and the construction demand environment maintains its H1 FY2026 trajectory, the year-on-year volume growth comparison in H1 FY2027 will be against a disrupted H2 FY2026 comparative, creating a base effect that flatters the reported growth rate. Combined with the full-year effect of the turnaround initiatives that contributed to the 4% own clinker improvement and the value-accretive sales mix management that supported margins through the disruption period, PPC Zimbabwe's FY2027 result has a structural setup that does not require exceptional execution to exceed FY2026's record.

The capital expenditure guidance for FY2027 includes maintenance investment to reduce the probability of a repeat mechanical disruption, which is the most directly value-protective capital allocation decision available given the demonstrated cost of a single gearbox failure on a single line.

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