PPC flags a plunge in its annual headline earnings
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THE SHARES of PPC, the 129-year-old cement producer, closed weaker on the JSE, as it flagged a plunge in headline earnings for the year to the end of March and announced that it was the process of selling its its subsidiary, PPC Aggregate Quarries Botswana, for R61 million as it buckled under mounting debt.
The share closed 4.18 percent lower at R3.21 on the JSE yesterday.
PPC told shareholders in a trading statement released yesterday that its subsidiary, PPC Botswana, had entered into a binding sale-and-purchase agreement with a Botswana-based construction and mining company to acquire a 100 percent stake in the quarry business. “PPC expects that the conditions precedent will be met before August 1, 2021,” said PPC.
Last month, the group announced that it had reached an agreement to sell PPC Lime for R515m as part of an ongoing capital restructuring programme. The group said the R500m net proceeds would be used to de-gear PPC’s South African balance sheet.
PPC expects to report headline earnings a share from continuing operations of between zero and 5 cents a share, representing a fall of between 91 and 100 percent compared with 54c a share in the prior period.
It expects a headline loss per share of up to 18c a share, representing a 167 percent fall from the profit of 27c a share in the previous year.
“Headline earnings is impacted by the impairments of property, plant and equipment raised at March 31, 2020, some of which are now reversed as at March 31, 2021,” said the group.
The group said earnings and headline earnings for the 2021 financial year were impacted by hyperinflation accounting in terms of IAS 29 – financial accounting in hyper-inflationary economies, resulting in a net monetary loss of R200m in the current year compared with a gain of R651m in the prior period.
However, earnings a share from continuing operations were likely to range between 63c and 68c per share in the 12 months to the end of March, said PPC, representing a surge of between 247 and 258 percent compared with a loss of 43c a share in the previous year.
PPC also said that it would likely report a surge of between 108 and 112 percent in group earnings a share to between 10c and 15c a share compared with a loss of 124c a share a year earlier.