By Alois Vinga
PPC Zimbabwe has hailed good business in the country with volumes having increased by 44% amid revelations that the local unit spurred significant impact across the group.
Presenting the group’s performance for the six months ended September 30 2023, PPC said operations in Zimbabwe saw a strong recovery in all its key metrics.
“Zimbabwe continued to win back market share it had lost during the planned extended kiln shutdown in the first half of the prior year. Cement sales volumes increased 44,0% mainly due to improved clinker availability for production,
“Increased local demand and a reduction in imports and a soft base in the prior comparative numbers due to the extended shutdown,” the group said.
During the period, PPC Zimbabwe changed its functional currency to US$ and reporting has therefore been simplified as hyperinflation accounting is no longer applicable.
The rand depreciated by 14,9% to the US$ when compared to the prior comparative period, bolstering the Zimbabwean overall performance when reported in South African rands.
For the local unit, revenue for the current period increased by 104% in rand terms to R1 743 million which, together with the focus on costs resulted in EBITDA margins increasing to 24,6%.
On a group scale, PPC delivered a pleasing performance across all its markets for the six months to 30 September 2023 (the current period) despite the weak macro environment for its core SA and Botswana group where it saw a decline in cement volumes.
Group revenue for the current period increased by 20.9% to R6 172 million (September 2022: R5 103 million) driven by a 4% increase in group cement volumes, price increases and the rand depreciation against the US$.
Profit before tax increased to R560 million (September 2022: R106 million) and profit after tax was R431 million (September 2022: R22 million). The effective tax rate for the current period is 23,0% (September 2022: 79%).
The prior period rate was negatively affected by a once-off de-recognition of a deferred tax asset in PPC Ltd and the impact of PPC Zimbabwe inflation.
“Following a strong recovery in market share and profitability in PPC Zimbabwe in the current period, the company anticipates at least maintaining these gains. Further improvements will become possible following the implementation of the fly ash project, which is still in the procurement stage,” added PPC.