PPC daily listed on the Johannesburg and Zimbabwe stock exchanges, said demand for cement in Zimbabwe in the first half to March 31 2012 grew to double digits, buoyed mostly by retail customers and concrete product manufacturers.
The strong performance in the first four months was however disturbed by a major transformer failure in February and March that necessitated clinker imports from South Africa at higher cost. Production has since resumed.
Group cement sales volumes for the period declined by 3% mainly due to weak demand for cement in the Western Cape and Botswana markets. Revenue for the group grew by 8% to R3,53 billion, up from R3,26 billion recorded in the same period last year. Cost of sales for the group increased by 11% to R2,3 billion, attributable to a 30% rise in electricity and diesel charges on average. Administration and other operating expenditure went up by 3% to R324 million, up from R314 million recorded the previous year.
Group Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) grew by 5% to R1,09 billion, up from R1,04 billion the previous year. However, cash generated from operations marginally fell to R890 million from R900 million recorded in 2011.
Operating profit for the group went up 4% to R0,86 billion, from R 0,82 billion recorded in the previous year.
Headline earnings per share grew to 77,6 cents, up 8% from 71,8 cents in the same period last year.
The company paid an interim dividend of 38 cents per share, up 9% from 35 cents per share paid in the comparative period.
“Our results improved despite being tempered by a weak demand in Western Cape and fierce competition of cement prices in all our regions,” group CEO, Paul Stuiver said in a statement accompanying financial results. He said administered price increases on electricity and fuel made cost containment difficult.
In terms of other external operations, PPC said demand for cement in Botswana declined by double digits, owing to a slowdown in that country’s government infrastructure spending. Lime volumes went up by 6% due to higher demand from steel and alloys industries as well as increased exports to Zambia and the Democratic Republic of Congo.
The company said trading conditions would remain challenging for the remainder of the year, adding demand in Botswana was likely to remain depressed in the second half.
The company forecast revenue from operations outside South Africa would grow by between 40%-50% in 2016. — Staff Writer.