daniel chigunwe
Michael Tome
PPC Limited says its operations in Zimbabwe posted a strong recovery in the year to March 2024, following the resumption of operations after an extended maintenance shutdown of the kiln in the first half of the 2023 financial year.
According to PPC, the company redeemed its local market share with strong demand coming from individual residential constructions and government-funded mega infrastructure projects.
In the period under review, PPCs local cement sales volumes surged 36,6 percent ahead of the 2023 financial year which was down 15,8 percent.
PPC Zimbabwe’s revenue almost doubled in the period, increasing by 90,9 percent in rand terms to R3 346 million on strong cement volumes and price increases.
Clinker purchases on the other hand continued to grow in the second half of 2024 as the full cost of purchased clinker grew 169 percent higher than the prior year.
In the annual financial statement to March 2024, PPC chairperson, Phillip Moleketi, said the
Zimbabwean market registered a positive comeback after plant maintenance.
“PPC’s operation in Zimbabwe delivered a strong recovery in the current year albeit off a low base following the extended maintenance shutdown of the kiln in the first half of the prior year.
“Zimbabwe won back the market share it had lost with demand across both residential construction and government-funded infrastructure projects,” said Moleketi.
PPC’s revenue for the year grew by 90,9 percent in rand terms to R3 346 million ahead of R1 753 million realised in the 2023 financial year driven mainly by robust cement volume uptake.
Revenue growth was also attributed to the five percent selling price increase that was effected in August 2022 and the 4 percent sales price increase effected in January 2024.
The cement producer’s EBITDA margins reduced slightly to 20,2 percent for the full year from 20,8 percent realised in the prior comparable period due to high electricity costs that emanated from a gradual tariff increase in October 2023.
The cement producer declared US$11 million in dividends which were paid during the year and this figure was an improvement from US$10 million declared in the 2023 financial year.
On the other hand, PPC Limited’s group cost of sales increased 16,3 percent to R8 409 million from R7 231 million and the increase in cost of sales was attributed to Zimbabwe, with the SA and Botswana group’s cost of sales declining marginally by 1,3 percent driven by lower sales volumes.
Group administration and other operating expenditures increased by 5,5 percent while the group’s EBITDA margin improved to 12,3 percent.
Consequently, trading profit surged to R619 million from R117 million. Of the R502 million increase, R395 million was attributable to Zimbabwe.
Despite the challenges that weighed on profitability in the past years, PPC Limited remains upbeat about its prospects which are centred on unlocking internal value and profitability.
PPC says it also intends to focus on cost awareness throughout the organisation, robust capital expenditure analyses and the creation of reliable internal business intelligence to support better quality decisions going forward.
The PPC unit however remains suspended from the Zimbabwe Stock Exchange (ZSE) following its suspension in June 2020 together with Old Mutual and Seed Co International on allegations they were fuelling inflation.
The three counters also had their fungibility suspended. Only Seed Co International relisted on the Victoria Falls Stock Exchange (VFEX).
Bongani Ndlovu