PPC 1Q17 results in line with expectations

PPC revenue for the period ended 30 June 2017 (1Q17) is ahead YoY while group EBITDA is in line with the year-ago period. The advance has been attributed to good cost management.

Johan Claassen, interim CEO, said: "Our focus is firmly on delivering improved profitability and liquidity in the shorter term while our longer term strategy remains unchanged. More specifically, we will focus our management effort on the new operations in the DRC and Ethiopia, ensuring that they deliver to expectations, whilst further optimising efficiency in our other businesses. We are committed to
unlocking long term sustainable shareholder value both through operational excellence and opportunities to achieve this through corporate action. To bolster the management team we have made key executive appointments and changes in Finance, SA Cement, Materials and Rest of Africa Cement".

The group’s cement sales volumes in South Africa fell marginally when compared to 1Q16 but two less trading days were noted in the quarter. On a like-for-like basis, volumes edged up 0.5 per cent, driven by solid performances in coastal and inland areas. Imports decreased by 27 per cent YoY.

Botswana also delivers steady results while Rwanda continues to see robust volume growth, leading to a capacity utilisation of 60 per cent in PPC’s Rwandan plant. PPC is also launching bulk cement, the first company to do so in the domestic market.

PPC Zimbabwe also saw double-digit volume growth compared with last year, and in June 2017 recorded the highest monthly volumes since June 1999. Pricing in US dollars is flat compared with the previous period. The country continues to experience liquidity constraints.

In the Democratic Republic of Congo, monthly sales are improving despite a muted trading environment. While imports from Angola have reduced significantly, local producers have stepped up competition. Moreover, excess capacity is putting a downward pressure on prices.

In Ethiopia the company started cement production in June 2017. However, as a result of high demand, more than 100,000t of cement had been pre-sold since February.