REGIONAL cement maker PPC says its unit in Zimbabwe recorded 10% sales volume growth period-on-period for the 11 months ended February 2021, with retail demand and government-funded projects being the main drivers.
In Zimbabwe, the cement maker operates a clinker plant in Colleen Bawn near Gwanda in Matabeleland South province, as well as a cement milling plant outside Bulawayo and another one in Harare.
Apart from South Africa and Zimbabwe, PPC also has units in Ethiopia, the Democratic Republic of Congo and Rwanda.
“PPC Zimbabwe continues to trade well. For the eleven months ended February 2021, PPC Zimbabwe cement sales increased by 10% period-on-period and 11% period-on-period for the five months ended February 2021,” PPC said in its latest operational update.
“Retail demand, concrete product manufacturers and government-funded projects are the main drivers of cement sales. PPC adjusted cement prices upwards in the second half of the 2021 financial year to recover input cost inflation.”
Group earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by between 25% and 30% period-on-period and 45% to 50% period-on-period for the five months ended February 2021, benefitting from increased cement sales and stringent cost control.
“The group has experienced the positive impact of improved cement sales, cost reduction measures, enhanced working capital management and cash preservation measures implemented over the 11 months to February 2021,” it said.
PPC said the South African debt has declined from R1.92 billion as at 31 March 2020 to R1.64 billion as at the end of February 2021.
“Given the improved financial performance and reduction in gearing levels, in particular in South Africa, key debt metrics are returning to traditional banking covenant levels. The group is in good standing with its lenders, with sufficient headroom in existing facilities to meet its operational requirements.”
The group’s free cashflow in the period under review is between 90% and 95% higher than the previous comparable period.
Although the group is experiencing positive momentum across most of its markets, it remains cautious on the outlook for cement demand given the prevailing uncertainties around the Covid-19 pandemic and its resultant impact on economic activity.
“PPC will remain focused on continuing to improve cost competitiveness through cost management initiatives and cash management. It will take the necessary measures to ensure that it can continue to serve its customers, protect its employees, and implement strategic initiatives to ensure financial sustainability through all demand cycles,” PPC said.
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