Sephaku Cement looks to cost-cutting measures despite net profit rise

Sephaku Holdings is embarking on a cost-reduction programme to reduce head office expenses over the next year. The initiative is in response to the current declining demand due to the depressed macro-economic performance.



Initially, the board of directors have been cut from 10 to seven by not replacing Mpho Makwana, Rose Raisibe Matiju and Kennet Capes who resigned their positions recently.



Sephaku Holdings has already posted an improved six-month performance to September, helped by its cost-efficiency programme, which has reduced the cost of sales by 3.2 per cent. Group net profit amounted to ZAR26.52m (US$4.3m), up from ZAR14.8m in the corresponding period of the previous year.



Lelau Mohuba, CEO of Sephaku Holdings, attributed the better performance in the six months up to September in part to price increases holding in most markets, resulting in a 5.4 per cent revenue rise to ZAR 1.16bn YoY.



However, the increased activity of blenders and importers in the 3Q18 placed downward pressure on Sephaku Cement's volumes. "The cement landscape continues to be stable with isolated incidences of intense competition for highly profitable markets," Dr Mohuba added.