PPC FY23-24 results bolstered by strong Zimbabwe performance

PPC has reported revenue of ZAR10,058m (US$551.8m) in FY23-24 (ended 31 March 2024), marking a 20.6 per cent increase from ZAR8339m in the same period a year earlier. According to the company, this was primarily driven by the strong performance in its Zimbabwean operations. EBITDA over the same time frame improved 38.6 per cent from ZAR896m to ZAR1242n, with the EBITDA margin up 1.6 percentage points to 12.3 per cent in FY23-24. 

In the South Africa and Botswana business, cement revenue in FY23-24 came in at ZAR6080m, an expansion of 5.2 per cent from ZAR5782m in FY22-23. The increase was mainly due to price rises and higher sales of clinker to Zimbabwe, which positively offset the 5.8 per cent decline in cement volumes seen over the same period. According to the company, competition remains stronger in the inland region where sales volumes have declined, especially since January 2024. Coastal volumes have fallen at an even higher rate due to poor demand, resulting from a depressed construction sector. 

Clinker sales from inland to Zimbabwe have more than doubled in the current year, supplementing the revenue increase in the South Africa and Botswana cement business. PPC achieved an average cement selling price increase of 9.7 per cent in FY23-24, compared to an eight per cent improvement in FY22-23. However, EBITDA advanced just 1.5 per cent from ZAR674m in FY22-23 to ZAR684m in FY23-24 with price increases insufficient to offset cost increases. 

Profit before tax in the South Africa and Botswana business increased to ZAR233m in FY23-24, versus a loss of ZAR126m in FY22-23, while profit after tax stood at ZAR88m in FY23-24, compared to a loss of ZAR328m in the previous year. 

PPC Zimbabwe, meanwhile, posted a 90.9 per cent YoY leap in revenue to ZAR3346m in FY23-24, compared to ZAR1753m in FY22-23. According to the company, Zimbabwe delivered a strong recovery in the current year off a low base following the extended maintenance shutdown of the kiln in the first half of the prior year. It also won back the market share it had lost with demand across both residential construction and government-funded infrastructure projects. Zimbabwean cement volumes advanced 36.6 per cent YoY in FY23-24 although growth has softened as the effect of the stronger base in the 2HFY22-23 starts to come through. 

Revenue in the materials business contracted six per cent YoY in FY23-24. Ready-mixed concrete volumes fell 18.2 per cent YoY in FY23-24 with aggregates volumes down 8.8 per cent over the same period. Total group capex for FY23-24 increased to ZAR400m, up from ZAR368m in the prior year. 

In January 2024 PPC sold its 51 per cent shareholding in CIMERWA for a total selling price of US$42.5m. PPC received the full selling price and paid the capital gains tax in Rwanda of US$372,000 in February. No further capital gains tax is reportedly payable in South Africa. According to the company, approval by the Common Market for Eastern and Southern Africa (COMESA) was expected within 120 days of the filing on 8 February 2024, but COMESA have requested and been granted an extension to 12 July 2024.