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PPC boosts profit, tough times ahead

Johannesburg - Southern Africa's biggest cement maker Pretoria Portland Cement [JSE:PPC] reported a 28% increase in full-year profit, helped by the non-recurrence of one-time charges and said it was pursuing expansion opportunities in other emerging markets.

PPC, which has been producing cement for the last 118 years and has been listed in Johannesburg for a century, said on Tuesday headline earnings per share for the year to end-September rose to 217c, within its forecast range of a 20% to 30% increase.

Headline EPS is the main gauge of earnings in South Africa and strips out certain one-time and financial items.

The group, which supplies cement to infrastructure projects such as Eskom's Medupi power station, said revenue rose marginally to R6.8bn, versus R6.7bn a year earlier.

The company said it was helped after charges last year related to a black empowerment transaction were not repeated this year.

PPC is gearing up for competition from a Chinese-South African joint venture, which is building a R1.65bn cement plant in South Africa.

It also faces competition from Nigeria's leading industrial conglomerate, Dangote Group, which had invested R779m to more than treble its stake in South Africa's Sephaku Cement to 64%.

Shrinking of the construction industry has already forced cement manufacturer Lafarge SA to initiate a 13% cut of its workers at its Lichtenburg plant in South Africa.

Shares of PPC are litle changed so far this year, underperforming a 13.7% increase in Johannesburg's all-share index     
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