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PPC reports positive first-quarter volumes in most markets

Aug 23 2017 10:21
Malcom Sharara, Fin24

Company Data

PPC Limited [JSE:PPC]

Last traded 2
Change 0
% Change -1
Cumulative volume 234452
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Harare - In a trading update released on Thursday, cement maker Pretoria Portland Cement (PPC) [JSE:PPC] said it has made its first payments totalling $32m towards funding commitments in the Democratic Republic of Congo (DRC).

“We are also progressing well in advancing the refinancing and restructuring of the group debt maturing in June 2018,” it said.

The cement maker said it will focus more on the new operations in the DRC and Ethiopia, ensuring that they deliver to expectations while further optimising efficiency in the businesses.

PPC said cement sale volumes in the DRC are improving notably following a slow start, although market conditions in the country remain challenging.

“In the DRC, monthly sales have tracked progressively better. We have doubled our sales volumes in each successive month despite a muted trading environment.”

On Zimbabwe, the company said operations continue to exceed expectations, with the investment in the Harare mill contributing to volume growth.   

“PPC Zimbabwe also saw double digit volume growth compared with last year, and in June 2017 recorded the highest monthly volumes since June 1999,” it said.

PPC estimates that growth in overall cement demand in South Africa improved during the first half of calendar year 2017 after a dampened first quarter.

“Our cement sales volumes in South Africa declined marginally when compared to the same period in the previous year, which, however, had two less trading days.

“On a like-for-like basis, volumes were up 0.5% driven by solid performances in both the coastal and Inland areas,” said PPC, adding that Botswana continues to deliver steady results.  

Revenue for the segment has tracked ahead of last year, while earnings before interest, tax, depreciation and amortisation are in line with the previous period.   

Rwanda continues to deliver robust volume growth, with capacity utilisation now reaching 60%.

“Monthly volumes have realised their highest level since commissioning two years ago and we have also launched bulk cement, the first offering of its kind in the Rwandan market."

Although cement production in Ethiopia only started in June 2017, more than 100 000 tonnes of cement had been pre-sold since February 2017, due to high demand. This is equivalent to annualised capacity utilisation of more than 60%.  

Commenting on the proposed merger of PPC and AfriSam, the company said it continues to evaluate a potential merger. “Management is committed to unlocking long term sustainable shareholder value."

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