JSE-listed South African cement company PPC aims to de-gear in the coming year as it cements the road ahead.
PPC chief executive Roland van Wijnen said in the firm’s 2021 integrated annual report published last week that the group planned to finalise its capital restructuring project in the 2022 financial year to ensure the group could work more assertively towards what PPC could grow into over the next decade.
“Our focus, though, remains on successfully implementing our current enhancement projects. PPC has a strong customer base and a recognisable brand which, together with our local roots, presents a unique opportunity for investors,” said Van Wijnen.
PPC managed to reduce its gross debt burden to R2.628 billion in 2021 from R5.8bn a year earlier as it benefited from a strong recovery in cement sales across its markets once lockdown restrictions eased, leading to an improved financial performance for the group.
Group revenue increased from R8.671bn in the 2020 financial year to R8.938bn in the 2021 financial year, mostly due to robust cement sales after lockdown restrictions eased across jurisdictions.
The contribution from the group’s South Africa and Botswana segment including materials increased by 5 percent to R6.187bn from R5.874bn in 2020, while revenue from the international segment contributed R2.751bn, a 1.6 percent decrease from the previous year of R2.797bn.
PPC said that, in South Africa, cement sales benefited from solid retail demand in the inland region, while coastal regions experienced a lagged recovery in demand.
Cimerwa in Rwanda experienced strong cement sales due to the roll-out of government projects, retail demand and exports to the Democratic Republic of Congo (DRC).
The company said while trading conditions in Zimbabwe were characterised by high inflation and a shortage of foreign currency, PPC Zimbabwe grew revenues and earnings before interest, taxes, depreciation and amortisation in functional currency. However, the 75 percent devaluation of the Zimbabwean dollar against the South African rand reduced PPC Zimbabwe’s contribution to group profitability.
“In the materials business, recovery was hampered by the impact of lockdowns although demand increased in some market segments,” said PPC.
The group said it was concerned about the threat of substandard cement imports in South Africa while they also posed a risk to the consumers who purchased these products. “As part of our responsibility to defend and protect the industry, PPC collaborated with The Concrete Institute and other industry players to lobby the government for relief against unfair competition and stricter import regulations.
“The group is also increasing consumer awareness around the risks of buying substandard cement products,” the group said.
PPC shares closed 4.78 percent lower at R3.39 on the JSE yesterday.
BUSINESS REPORT