PPC reports 11% increase in revenue in FY22

PPC has reported group revenue for the 12 months ended 31 March 2022 of ZAR9882m (US$621.9m), an increase of 11 per cent YoY. Excluding Zimbabwe, group revenue was up five per cent, while revenue in PPC Zimbabwe alone advanced by 34 per cent on the back of a 28 per cent upturn in volumes. Profit before tax from continuing operations came in at ZAR186m, compared to ZAR1765m in the year-ago period, due in part to PPC Zimbabwe incurring a loss before tax of ZAR67m, and impairments of ZAR38m.

Cement sales volumes over the 12-month period were in line with the previous year as demand normalised from a high base. Compared to the 12 months ended 31 March 2020, cement sales volumes increased by nine per cent with South Africa and Botswana sales continuing to benefit from demand growth in the informal and rural markets. Inland region sales volumes exceeded pre-COVID-19 levels, while volumes in the coastal region saw low single-digit YoY growth due to a partial recovery in industrial construction demand. However, despite the improvement in demand, cement sales in the region are still below pre-COVID-19 levels.

Total costs increased by 19 per cent YoY to ZAR9360m, with PPC Zimbabwe seeing a hefty 85 per cent rise in costs. The company introduced average cement price increases of 4-7 per cent YoY, which partially offset the cost inflation.

In the materials business there was weaker demand in the 2HFY22 due to high rainfall, following strong demand in the 1HFY22 as construction activity began to recover. For the 12 months ended 31 March 2022, sales volumes for the ready-mix and aggregates businesses grew by seven and 10 per cent, respectively, YoY. Fly ash sales fell 17 per cent as sales in the prior period had been boosted by a shortage of alternative extenders such as slag. Overall revenue for the materials division was up 10 per cent to ZAR1086m, compared to ZAR991m in FY21. 

Despite the challenging trading conditions in Zimbabwe, cement sales volumes for the 12 months ended 31 March 2022 increased 28 per cent YoY on the back of retail demand and support from government-funded projects. Revenue expanded by 34 per cent to ZAR2172m on the back of higher volumes, while EBITDA declined by 18.3 per cent to ZAR393m with a reduced EBITDA margin of 18.1 per cent, compared to 29.6 per cent in FY21. PPC Zimbabwe also incurred additional costs importing clinker to support volume growth and offset the impact of a planned and unplanned kiln shutdown during the period.

In Rwanda cement sales volumes grew by 20 per cent YoY in the 12 months ended 31 March 2022 as demand rebounded strongly in the 2HFY22 following the easing of lockdown restrictions. Revenue was up seven per cent to ZAR1209m. Compared to the 12 months ended 31 March 2020, volumes and revenue improved by 30 and 29 per cent, respectively. EBITDA of ZAR341m in FY22 was in line with the previous year, while the EBITDA margin declined to 28.2 per cent, versus 30.3 per cent in the 12 months ended 31 March 2021.

During FY22 the company sold PPC Aggregate Quarries Botswana and PPC Lime Ltd, with effect from 30 September and 16 September, respectively.