SOUTH African cement maker, PPC Limited, has reported a 12% decline in revenue from its Zimbabwe operations during the 10 months ended January 31, 2025, owing to the strengthening of the rand.
In a trading update for the 10 months ended January 31, 2025, PPC revealed that local volumes declined 9% in the current period, consistent with the 9% decline at the half-year.
The period under review was negatively affected by the volatile ZiG currency which eroded consumer and household incomes.
“Volumes declined 9% in the current period, consistent with the 9% decline at the half-year. This trend started improving in January 2025, which is positive given that both January 2024 and 2025 had the same level of imports in the market,” PPC said in a statement for the period under review.
“Revenue declined by 12% in rand terms due to the rand strengthening in the current period compared to the comparable period.”
PPC said despite the lower revenue, the earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 6% relative to the comparable period and margins grew by 4,4 percentage points fto 26%.
This, the cement maker saidd, was due to the strict cost control measures implemented by the group’s local outfit.
“Group EBITDA margins improved to 16,6% in the current period from 13,4% in the comparable period. This resulted in a 20% increase in total group EBITDA,” the cement maker said.
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“The increase in both absolute EBITDA and EBITDA margins is due to all business units improving their results mainly as a consequence of the turnaround plan.”
PPC said capital expenditure for the group was expected to come in slightly below the guidance of ZAR400 million to ZAR450 million for the full financial year.
“Some optimisation capital expenditure is being re-assessed while maintenance expenditure was as planned,” PPC said.
“As the stringent focus on costs and working capital take effect, the South Africa and Botswana group’s free cash flow, being net cash inflow before financing activities excluding dividends from Zimbabwe, increased by a substantial 90% to ZAR692 million in the current period from ZAR364 million in the comparable period.”
PPC said that as of January 31, 2025, the South African and Botswana group was in a net cash position of ZAR106 million.
“PPC Zimbabwe continues to remain debt free and held US$13 million in unencumbered cash at 31 January 2025,” PPC said.
“PPC Zimbabwe also increased its free cash flow generation leading to an increase in total dividends declared and paid of US$13 million year-to-date compared to the US$11 million paid in the comparable period.”
PPC said the board would consider a dividend, following the strong cash generation in the current period, resulting in record dividends from PPC Zimbabwe and the healthy cash flow generation in South Africa.
