Zimbabwean Government Projects Buoy PPC Performance
South African cement producer, PPC Limited, recorded solid performance for the financial year 2024 (FY24) buoyed by strong performance by its Zimbabwean operations, reported The Herald.
The group revealed that revenue rose 20,6 per cent to R10 058 million for the review period, driven primarily by a strong performance in PPC’s Zimbabwean operation.
The South African and Botswana operations revenues increased only marginally by 5.2 per cent, driven by price increases and increased sales of clinker to Zimbabwe.
In contrast, revenue from the materials businesses declined by 6 per cent compared to the previous year.
According to the performance review update, PPC’s operation in Zimbabwe registered a strong recovery in 2024 albeit off a low base following the extended maintenance shutdown of the kiln in the first half of 2023. Said PPC:
Zimbabwe won back the market share it had lost with demand across both residential construction and Government-funded infrastructure projects.
Cement sales volumes in Zimbabwe rose by 36,6 per cent when compared to the prior year.
During the year under review, PPC Zimbabwe’s revenue almost doubled, increasing by 90,9 per cent in rand terms to R3 346 million on strong cement volumes and price increases.
PPC said the full-year impact of the 5 per cent selling price increase that was effected in August 2022 (prior year) and the 4 per cent sales price increase effected in January 2024 also contributed to the revenue increase.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) margins reduced marginally to 20,2 per cent compared to 20,8 per cent in FY23 but significantly off the half-year margins of 24,6 per cent due to high electricity costs resulting from a gradual tariff increase.
Clinker purchases also continued in H2 FY24 and the full cost of purchased clinker was 169 percent higher than the prior year.
The Zimbabwe unit paid a US$11 million dividend during the year compared to US$10 million in the prior year.
Meanwhile, the unit remains suspended from the Zimbabwe Stock Exchange (ZSE) following its suspension in June 2020 together with Old Mutual and Seed Co International on allegations they were fueling inflation.
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