PPC’s group cement sales volumes rose by five per cent above last year’s figure, with strong demand growth in its African businesses offsetting lower demand in the core South African business.
PPC’s revenue increased by nine per cent to R4541m for the half year ended March 2015, on the back of increased volumes in Zimbabwe, Botswana and Rwanda, as well as the consolidation of sales from Safika Cement and Pronto Readymix.
Cement selling prices declined in South Africa and Botswana, while limited growth was recorded in other territories. However, the favourable impact of the devaluation of the rand contributed positively to group revenue.
Group revenue was further supported by a 10 per cent growth in revenue for the lime division.
On a like-for-like basis, excluding the consolidation of Safika Cement and Pronto Readymix, group revenue would be one percent above last year at R4126m, PPC said in a statement.
A total of 28 percent of revenue was generated from outside South Africa in the period under review.
The company said it was on track to meet its target of generating 40 per cent of revenues from outside South Africa by 2017. It also continues to “to explore further expansion opportunities in the rest of the African continent.” PPC’s group cement revenue rose four percent to R3752m while EBITDA fell 10 per cent to R988m. Consequently, the EBITDA margin fell to 26 percent from 30 percent the previous year.
EBITDA decreased by four percent to R1123m and operating profit, excluding the impact of empowerment transaction IFRS 2 charges and restructuring costs, was down 11 per cent when compared to the previous reporting period at R789m largely due to the weakness in the core South African cement business.
On a like-for-like basis, excluding the impact of newly-acquired businesses, EBITDA would have declined by nine percent to R 1050m.
During the review period both group EBITDA and operating margins contracted; recording 25 and 17 per cent, respectively. Following an impairment assessment review, an impairment charge of R44m was recorded.
Furthermore, goodwill of R22m was impaired on the Pronto Readymix transaction as well as R15m of costs that were capitalised on the Algeria transaction, due to the expiry of the memorandum of understanding.