Pretoria - Listed cement and lime producer PPC improved its broad based black economic empowerment (BBBEE) contributor level to Level 4 from Level 8 in December because of a new empowerment transaction.
The company confirmed this on Thursday, but indicated that details related to “the proposed new B-BBEE III transaction” would be communicated to shareholders during the first half of this calendar year.
Last month PPC said the conclusion of its first empowerment transaction had resulted in a cash inflow of R1 billion in December.
It said this inflow had improved the significant de-gearing evident in the company’s balance sheet in the six months to September.
“The company’s balance sheet has been strengthened significantly against the cyclical nature of the business,” the company said.
PPC shares rose 0.73 to R6.92 on the back of the news.
PPC said the R1 billion cash inflow from the completed BBBEE transaction would be used to further reduce the company’s debt and fund capital expenditure, particularly the Slurry kiln 9 project.
The company was forced last year accelerate a planned capital raise and the quantum of the rights issue to R4bn when S&P downgraded the group’s credit rating.
The capital raised from the rights issue was largely be used to repay debt funders for a guarantee extended to PPC bondholders, an existing term facility that redeemed a PPC bond in March last year and the redemption of BEE debt that matured in December.
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PPC said its overall cement sales volumes in South Africa had increased by 4 percent in the nine months to December but average selling prices decreased by 4 percent.
It said Gauteng and inland regions had experienced high single digit declines in cement sales volumes in the quarter to December compared to the previous quarter following selling price increases implemented in these regions in October.
It said it had implemented further price increases in selected regions effective from the beginning of this month and the impact of this would begin to reflect on the average selling price in the next few months.
The company said the business units of Zimbabwe, Rwanda and Botswana had collectively recorded cement sales volume increases of 9 percent for the nine month period to December.
PPC said pricing in all the territories remained under some pressure and group cement sales volumes for the nine months to December were up 4 percent compared to the previous nine month period.
It said the $82 million Harare Msasa mill was completed on time and $3 million below budget, all the performance tests had now been successfully concluded and the final handover achieved late last month.
Overall project construction in the Democratic Republic of the Congo was at 95 percent, with construction of the cement factory complete and ready for commissioning, it said.
PPC added project construction in Ethiopia was at an advanced stage and the Slurry SK9 new kiln line project was progressing well with overall progress at 54 percent, with the schedule for commissioning and ramp-up remaining the first half of next year.
The company said with the international projects at advanced stages, the focus had largely shifted to operational performance and achieving maximum ramp-up without disrupting the market.