Sub-Saharan Africa building materials and solutions group PPC cut debt to R1 billion by the end of March 31 from R2.2bn, stabilising its financial position after more than two years of capital restructuring.
CEO Roland van Wijnen said resilient cash generation efforts to drive efficiencies had helped mitigate inflationary pressures, and the work to stabilise the financial position of the group, which had included the sale of non-core assets, had been finalised.
In the new financial year, if cash generation was the same and all other things “normal”, the group might be able to declare a dividend, but it was too early to make that kind of prediction given the uncertain trading environment, Van Wijnen said in a telephone interview yesterday.
He said working capital was tightly managed through the past year in line with management focus and cash available from operations improved 19 percent to R1.2bn.
This and non-core asset sale proceeds supported R1.2bn lower debt.
“Our efforts to prudently manage cash and debt has placed PPC in a robust financial position to navigate all economic cycles,” said PPC CFO Brenda Berlin.
A 3c headline earnings per share loss was reported compared with 3 cents profit the previous financial year.
Commenting on the new financial year, Van Wijnen said the rising input costs had been a surprise, but they doubled down on cost management and, for instance, had raised prices in June rather than the traditional July increase. South African sales were growing in the lower single-digit figure range, he said.
PPC was also benefiting from long-term coal contracts, so it was less exposed to spot prices and from the burning of tyres as fuel at coastal plants, but transport fuel price increases had to be passed on in pricing.
He said a de-carbonisation strategy was put in motion in November.
By the 2025 year end, PPC aimed to reduce carbon emissions by 10 percent or 76 kilograms per ton of cementitious product through clinker-factor reduction, alternative fuels use and renewable energy, and equipment enhancements.
In the past year, the clinker factor was reduced by 5 percent year-on-year and carbon emissions by roughly 8 percent per ton of cementitious product.
Group revenue rose 11 percent to R9.9bn due to double-digit volume growth in Rwanda and Zimbabwe and normalised volume growth in South Africa and Botswana. Excluding PPC Zimbabwe, where there was hyperinflation, revenue growth was 5 percent.
Despite volume growth and double-digit cost inflation in many input costs, the increase in costs was contained at seven percent, excluding Zimbabwe-related costs.
Stripping out non-cash items such as impairment reversals and the hyperinflation impact, pre-tax earnings were maintained.
South Africa and Botswana cement demand normalised following the post- lockdown spike during the financial year, and cement sales volumes grew by 6 percent.
PPC said it had yet to experience any meaningful uplift in cement sales volumes from the South African government’s infrastructure programme, other than limited road construction and rehabilitation activity.
PPC Zimbabwe continued to trade well and ahead of expectations despite its tough trading and economic environment, with cement sales volumes up by 28 percent year-on-year due to retail demand and support from government-funded projects.
edward.west@inl.co.za
BUSINESS REPORT