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REGIONAL cement maker Pretoria Portland Cement (PPC) stocks dropped as much as 17 percent on Monday, on news that the company’s headline earnings per share (Heps) for the six months to end-September 2016 are expected to be between 65 percent and 85 percent lower than reported for the previous six-month period to end-March 2016.
This translates to expected headline earnings of between 19 cents and 8 cents per share, PPC said in a trading statement. It added that basic earnings per share for the six months to end-September 2016 are expected to be between 70 percent and 90 percent lower than the basic earnings as reported for the previous half year, translating to expected basic earnings of between 21c and 7c/share.
PPC attributed this drop mainly to the high financing costs incurred for the raising fee and related interest charges for the R2bn liquidity and guarantee facility secured in June 2016 to redeem the outstanding PPC notes.
The non-recurrence of the exceptional profit of R117m made on the sale of non-core assets in the prior period also contributed to the decline in basic earnings per share. In addition, the devaluation of local currencies – in particular the Democratic Republic of Congo and Rwanda – against the US dollar also had a significant impact.
PPC pointed out that the above information has not been reviewed or reported on by the company’s external auditors.
PPC stocks staged a strong recovery in afternoon trade on the JSE and stood at R5.60 on the JSE at 15:51, down 1.93 percent.
In June this year, PPC raised a R2 billion ($148,14 million) liquidity and guarantee facility to redeem the outstanding PPC notes, which attracted high costs.
Also, PPC shareholders in August approved a rights issue to raise $253 million as part of a strategy to review its balance sheet and to pay off debts due this year and next year. — Fin24.
derick.khumalo