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Johannesburg - PPC shares fell nearly 5% on Tuesday after the cement maker said its aggressive expansion plans could force it to cut its dividend payments.
South Africa's largest cement maker is on a push to boost sales across the continent to lessen its reliance on a domestic market that has been hit by anaemic growth and waves of mining strikes.
With four new African plants under construction and a fifth in the pipeline, the company may need to scale back pay-outs to shareholders, said chief executive Ketso Gordhan.
"Clearly, as the demand on the balance sheet grows, we are going to review that," he said.
"I don't think we will reach a point where there will be no dividend, but there is a possibility that it will go down."
Additional plant
PPC's dividend yield of 4.7% puts it in the top 15% of the 166 stocks in Johannesburg's All-Share index, according to data.
PPC's planned factory in Rwanda will likely start producing cement by early next year, while plants in Zimbabwe, Ethiopia and the Democratic Republic of Congo are due to start production in 2016, Gordhan said.
PPC is now doing a feasibility study in Algeria, where it could start producing cement by early 2017, he said, adding it was looking to construct an additional plant in either north or central Africa.
PPC, which reported a 50% rise in first-half earnings thanks to a tax adjustment, said cement volumes were little changed for the period.
Shares of PPC were down 4.8% at R31.38 rand in early afternoon trading.
South Africa's largest cement maker is on a push to boost sales across the continent to lessen its reliance on a domestic market that has been hit by anaemic growth and waves of mining strikes.
With four new African plants under construction and a fifth in the pipeline, the company may need to scale back pay-outs to shareholders, said chief executive Ketso Gordhan.
"Clearly, as the demand on the balance sheet grows, we are going to review that," he said.
"I don't think we will reach a point where there will be no dividend, but there is a possibility that it will go down."
Additional plant
PPC's dividend yield of 4.7% puts it in the top 15% of the 166 stocks in Johannesburg's All-Share index, according to data.
PPC's planned factory in Rwanda will likely start producing cement by early next year, while plants in Zimbabwe, Ethiopia and the Democratic Republic of Congo are due to start production in 2016, Gordhan said.
PPC is now doing a feasibility study in Algeria, where it could start producing cement by early 2017, he said, adding it was looking to construct an additional plant in either north or central Africa.
PPC, which reported a 50% rise in first-half earnings thanks to a tax adjustment, said cement volumes were little changed for the period.
Shares of PPC were down 4.8% at R31.38 rand in early afternoon trading.
