The increase was mainly due to two months of zero sales in April and May last year (2020) during the Level 5 lockdown. File photo.
The increase was mainly due to two months of zero sales in April and May last year (2020) during the Level 5 lockdown. File photo.

Sephaku’s interim earnings expected to improve

By Edward West Time of article published Oct 4, 2021

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Earnings before interest, tax, depreciation and amortisation (EBITDA) of Sephaku Holdings subsidiary Métier Mixed Concrete increased for the six months to September 30 by 118–122 percent year-on-year, according to an operational update on Friday.

The increase was mainly due to two months of zero sales in April and May last year (2020) during the Level 5 lockdown.

Compared to the interim period ended September 2019, Métier’s EBITDA would be 90–95 percent higher, in spite of 8–12 percent lower sales volumes. Cost-saving and price improvement measures had been maintained.

Métier’s expansion into the Western Cape had been established with the opening of its first plant in Bellville. Sales were expected to grow in coming months. Expansion costs were minimal as under-utilised assets were used to penetrate the market.

In the six months to June 30 this year, Sephaku Cement (SepCem) volumes were 22 percent and 12 percent respectively above those achieved in 2020 and 2019.

Pandemic restrictions reduced the 2020 volumes during the second quarter. The sales volumes for the nine months ended September 30 this year were expected to be 4–6 percent higher year-on-year, and 11–15 percent higher than those achieved in 2019. The volumes in 2019 were impacted by competition from blenders in the inland markets and importers in KZN.

SepCem implemented price increases in February and August this year, but the price increases on bagged cement were discounted due to intense competition.

Although SepCem’s EBITDA for the nine months was expected to be 12–15 percent higher than in 2019 and 2020, plant maintenance this year, mainly from an unplanned kiln stoppage in late September, would likely result in a comparatively flat EBITDA for the full year.

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BUSINESS REPORT ONLINE

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