PPC 1H17 earnings strong on robust Zimbabwe and Rwanda sales
South Africa’s PPC Ltd reported in its inaudited 1H17 accounts a 36 per cent YoY rise in first-half earnings, supported by a strong performance in Zimbabwe and Rwanda. Headline earnings per share increased from ZAR0.14 to ZAR0.19 per share.
Group revenue edged up one per cent to ZAR5.188bn from ZAR156m in the comparable year-ago period, while EBITDA advanced four per cent to ZAR1.2bn. Volumes sold increased by two per cent to around 3Mt. Net profit attributable to PPC shareholders increased by 188 per cent to ZAR294m.
While profits slumped in the domestic market as seen an improved return in other African market. In addition, PPC increased its cement capacity by 33 per cent in the year ending 31 March 2017 following the commissioning its Zimbabwe mill and projects in the Democratic Republic of Congo (DRC) and Ethiopia.
Revenue in southern Africa cement, which includes Botswana, slipped but realised higher selling prices of two per cent. PPC increased prices in February and August 2017. Volumes fell by 1-4 per cent in this segment but with two less trading days. The lower volumes inland were offset by marginal growth along the coast. Imports remain at similar levels to 1H16. EBITDA was stable at around 25.6 per cent.
In Rwanda and Zimbabwe volume growth supported a revenue increase of nine per cent at a time when selling prices have been stable. EBITDA expanded by a robust 25 per cent to ZAR422m, with EBITDA margins expanding from 30 to 34 per cent.
Rwanda continued to deliver robust volume growth, with plants running at a capacity utilisation rate of over 65 per cent and sales expanding by more than 30 per cent YoY. The company also benefitted from improved market penetration as it launched its bulk solution in August 2017 to service the construction and construction product markets resulting in the improving market penetration.
PPC Zimbabwe grew volumes by more than 25 per cent compared with last year, achieving new sales records in the process. In the north of the country, the volume growth was backed up by the commissioning of the Harare mill while average sales prices rose by four per cent in US terms YoY. Demand is being driven by housing and asset investments.
The cement producer completed its new plants in the DRC and Ethiopia and the works are in the process of being tested and commissioned, which process will likely be fully completed by the end of the current financial year. During the period the limited production was sold into the market.
