PPC becomes another lockdown casualty as cement maker loses 95% SA sales
CAPE TOWN – Pretoria Portland Cement (PPC), Africa’s biggest cement maker, lost 95 percent of its South African sales in April over the same month a year before due to the lockdown, the group said in an update on Thursday.
The share price gained 3.05 percent to R1.35 on Thursday morning, with the price being 76 percent lower than its 52-week high and 82 percent higher than its low over the same period.
Its operations were constrained in their respective African jurisdictions during April, and only PPC Barnet in the Democratic Republic of Congo (DRC) had been able to operate and was expected to produce similar volumes compared to the same period last year.
CIMERWA and PPC Zimbabwe partially resumed operations in Rwanda and Zimbabwe in the second half of April.
Cement sales volumes in these countries were expected to be around 15 to 20 percent of the volumes sold in April 2019.
In South Africa, only PPC Lime sold small quantities to customers deemed by the authorities as essential providers. Overall sales volumes in South Africa for April were expected to be about 95 percent lower compared to April 2019.
PPC South Africa was, however, preparing to start production to operate in line with the risk-based regulations and related Covid-19 risk levels announced by the South African government on April 25.
Cement and construction materials businesses are allowed to ramp up to 50 percent of employees at a plant in Phase 4 of the South African lockdown.
“The uncertainty around the further development of the containment of the coronavirus makes it necessary for PPC to work with various scenarios,” management said on Thursday.
The group, with other members of the industry, had sent a request to the government to support the local industry, expedite construction work and implement the announced measures around infrastructure development and giving priority to local manufacturing.
PPC had implemented various cost reduction and cash preservation actions to protect liquidity, through and post the lockdown period. Committed facilities showed sufficient headroom in South Africa under various economic scenarios.
The was also continuously engaging with international funders to ensure sufficient liquidity in its international operations.
AT refinancing and restructuring project announced in October 2019 was continuing and update of this project would be given at the announcement of the company’s annual results.
Acting chief financial officer Ronel van Dijk, who was appointed on November 1, 2019, had been appointed as the permanent CFO.