PRETORIA – Listed cement and lime producer PPC’s strategy to expand into the rest of Africa has started to bear fruit, despite continuing challenges in many of the African markets in which it established plants.
Johan Claassen, the chief executive of PPC, said on Friday that the group’s diversified portfolio had enabled the company to offset the weaker South African performance with robust growth in its rest of Africa segment.
“We are very pleased with our rest of Africa operations, which grew volumes by more than 34 percent, increased revenues by 36 percent to R1.7 billion and improved Ebitda (earnings before interest, tax, depreciation and amortisation) by 18 percent to R499 million. “This performance was supported by robust volume growth in Zimbabwe and a positive contribution from the DRC (Democratic Republic of Congo),” he said.
Claassen added the first phase of PPC’s Cimerwa plant upgrade in Rwanda, which involved de-bottlenecking the plant to increase production capacity, was successfully completed in the six months to September and they began to realise the benefits towards the end of the reporting period when record volumes were achieved.
However, the revenue achieved by the Cimerwa plant declined to R402m from R433m in the prior period because of a 7 percent reduction in volumes, while Ebitda slumped to R92m from R168m, because of the impact of the cost of maintenance and clinker imports during the shutdown period.
Claassen said PPC Barnet DRC continued to encounter challenging market conditions, which were characterised by overcapacity and muted cement demand due to political uncertainty.
Shares in PPC closed 6.15 percent lower at R5.95 on the JSE on Friday.