PPC Zimbabwe triples cash holdings, remains debt-free

Nqobile Bhebhe

Zimpapers Business Hub

PPC Zimbabwe has again demonstrated its financial strength and operational discipline, closing the financial year ending March 31, 2025 with a debt-free balance sheet and unrestricted cash holdings of R118 million, nearly triple the R40 million recorded at the same time last year.

R118 million is equivalent of US$6 656 784 at an exchange rate of US$1/R17.7256 as at Tuesday morning.

The Zimbabwean unit declared and paid dividends amounting to US$13 million for the year, up from US$11 million in the previous financial year. This strong cash generation played a pivotal role in the performance of its parent company, PPC Ltd, enabling the group to declare a gross cash dividend of R274 million. Of this, R244 million was directly attributable to dividends received from Zimbabwe.

“Zimbabwe remains debt-free and had unrestricted cash holdings at 31 March 2025 of R118 million, up from R40 million at 31 March 2024. Some 94 percent of PPC Zimbabwe’s cash is held in hard currencies,” the company said in a statement.

This performance comes despite a challenging operating environment that saw a 5.5 percent decline in cement sales volumes year-on-year. Nonetheless, the company managed to post a solid financial outturn, attributed largely to stringent cost control measures and improved operational efficiencies.

“While revenue for the current year decreased by 6.7 percent to R3.122 billion (FY24: R3.346 billion), profitability improved significantly due to improvements across all cost lines – variable, fixed and administrative costs,” PPC said.

The company further noted that: “Against a background of volumes reducing by 5.5 percent, cost of sales reduced by 14.4 percent (R392 million) and admin and other operating expenses reduced by R46 million.

“A combination of lower volumes sold and improved in-country clinker production resulted in a lower volume of purchased clinker, further improving margins.”

This cost-conscious approach paid off. Earnings before interest, tax, depreciation and amortisation (EBITDA) surged to a record R849 million, up from R675 million in FY24. The EBITDA margin rose 7 percentage points to 27.2 percent from 20.2 percent in the previous year.

Capital expenditure for the period under review amounted to R147 million, an increase from R105 million in FY24, driven mainly by necessary maintenance work at the Colleen Bawn integrated plant.

“The driver of the increased spend was maintenance expenditure at the Colleen Bawn integrated plant due to two kiln stoppages in the current year, mainly to replace mill liners, compared to one short stop in the prior year given the extended kiln shutdown in FY23,” the company explained.

PPC Zimbabwe’s robust financial performance continues to bolster the wider group. In June 2024, the PPC board adopted a revised dividend distribution policy. This policy separates dividend flows based on leverage levels in the South African and Botswana operations, and those derived from gross dividends received from Zimbabwe. Notably, the SA and Botswana operations were also net cash positive as of 31 March 2025.

After reviewing its five-year capital investment strategy, which includes the new Western Cape RK3 plant, the board resolved to maintain its dividend payout strategy.

“An ordinary dividend of 17.6 cents per share has been declared, resulting in a gross cash outlay of R274 million (FY24: ordinary dividend of R213 million). This is broken down as follows: a dividend of 1.9 cents per share (R30 million) from the SA and Botswana group; plus a dividend of 15.7 cents per share (R244 million) being the dividends received from Zimbabwe,” the company noted.
Group CEO Mr Matias Cardarelli emphasised the broader turnaround strategy underpinning the group’s performance.
“The past year has been one of rebuilding our foundations, changing the strategy, action and delivery. Tough decisions were taken in order to simplify our structure, secure highly skilled and experienced talent and more importantly, engage with our people to disseminate the new organisational culture,” he said.
“Implementing phase one of our ‘Awaken the Giant’ strategic turnaround plan has resulted in a step change in PPC’s FY25 margins, profitability and cash generation.
“Over the past year, we focused on our core competencies, turning previous gaps into opportunities. The cost discipline and accountability culture implemented across the organisation significantly improved business performance and profitability.”
Looking ahead, the company stated that its long-term sustainability strategy does not hinge on broader economic recovery but on unlocking internal value.
“Our focus will continue, as demonstrated in the FY25 results recovery, to be on unlocking internal value. Ultimately, our competitiveness strategy will position PPC even better once infrastructure projects begin to materialise,” the company added.
PPC reaffirmed its commitment to supporting the growth of a successful local cement industry, underscoring Zimbabwe’s strategic importance to the group’s long-term growth trajectory.