Online Reporter
Business Reporter
Zimbabwe has emerged as the standout performer for Pretoria Portland Cement (PPC) in its latest trading update, with strong demand and a protective tariff on imports driving a 22 percent increase in sales volumes for the four months to July 2025.
The company said its local operations continue to generate robust cash, despite an extended plant shutdown earlier in the period. The growth was attributed to a combination of heightened consumer demand and the Government’s introduction of a 30 percent tariff on imported cement in May.
This policy shift provided the listed cement maker with a firmer footing against cheaper imports while stimulating local production.
PPC Zimbabwe temporarily shuttered its Colleen Bawn plant during the first two months of the reporting period, part of a planned three-year performance improvement programme to boost long-term clinker output. Although the shutdown led to a higher reliance on imported clinker and temporarily dented margins — EBITDA fell to 15,3 percent from 29 percent a year earlier — the company stressed that profitability had normalised after the plant came back online.
“Following the extended shutdown, monthly EBITDA margins returned to the levels achieved in the comparable period,” PPC noted, despite the temporary dip, cash generation remained resilient.
The business declared US$6 million in dividends during the period,compared with none in the prior year,and subsequently announced a further US$14 million, bringing the half-year payout to US$20 million. That marks a five fold increase on the US$4 million declared in the same period last year.
Additionally, PPC said the sale of its Arlington property for US$30 million, announced in August, remains on track, though it had not yet been recognised in the July accounts.
At a group level, PPC continued to deliver on its “Awaken the Giant” turnaround strategy, which targets margin expansion and stronger cashflows. For the period under review, group revenue rose 4 percent compared with the same four months in 2024, underpinned by growth across both Zimbabwe and the South Africa and Botswana operations.
Group EBITDA advanced more than 20 percent year-on-year, with margins improving to 15,9 percent from 13,7 percent previously. The company attributed this to improving efficiencies in Zimbabwe alongside steady performance in the southern markets.
Management expects the positive momentum to carry into the second half of the year as margins continue to expand. Zimbabwe’s contribution is forecast to rise further while South African margins are set to ease slightly in August and September.
Operational cash generation from the South Africa and Botswana unit, before financing costs and capital expenditure on PPC’s flagship RK3 integrated cement plant in the Western Cape, is also expected to remain positive.
PPC confirmed that of the US$20 million dividend declared by its Zimbabwean subsidiary,US$12 million had already been remitted, with the balance due in October. In addition, the group paid an ordinary dividend of R274 million to shareholders, underscoring its commitment to a sustainable payout policy.
In its home market, PPC reported a modest 2 percent growth in sales volumes across South Africa and Botswana. Gains were driven largely by stronger retail demand and clinker sales to the Zimbabwean unit.
The region also benefited from efficiency gains linked to the turnaround strategy, which helped push EBITDA margins sharply higher. The margin rose to 17,7 percent in the current period compared with 10,3 percent a year earlier.
Management attributed part of the uplift to the timing of scheduled plant shutdowns, which had a favourable impact in the reporting window. Once normalised, the margin is expected to stabilise around 17 percent for the half year ending September.
Despite the ongoing challenges in South Africa’s construction sector, the company noted that the turnaround initiatives were delivering tangible results. These include sharper cost controls, improved production planning, and targeted customer engagement.
Looking ahead, PPC said it remains focused on driving competitiveness and shareholder value through its turnaround plan. The company aims to leverage its established regional footprint, strengthen operational efficiency, and increase margins further.
“The positive impact of improved operational efficiency and the right commercial focus, in line with the ‘Awaken the Giant’ strategy, will enable PPC to continue to compete effectively in the market while delivering returns to shareholders,” the group said.
The RK3 project in South Africa, a major capital investment intended to consolidate PPC’s market position, remains on schedule, with gearing projections unchanged. Full details of performance for the six months to September 2025 will be released in late November.
Zimbabwe remains the brightest spot in PPC’s portfolio. Strong demand, regulatory support, and improved plant performance have not only cushioned the group’s earnings but also positioned the business for sustained growth in the regional market.
