CAPE TOWN – PPC, the leading cement producer in Africa, lifted revenue by only one percent to R10.4billion in the year to end March 31, 2019, an indication of the tough trading conditions in the construction sector.
Cement volumes sold also only increased by one percent to 5.9million tons.
Nevertheless, the business benefited from the scheduled restructuring of the PPC head office and the R70/ton cost savings initiatives in southern Africa.
Group overheads decreased significantly by 19percent, resulting in a cost reduction of R260million.
As a result, group earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 4percent to R1.95bn.
Headline earnings per share increased 33percent to 20cents.
Outgoing chief executive Johan Claassen said that the group had produced a “solid” set of results through being successful in executing its FOH-Four strategic priorities, with focus areas being financial, operational, human capital and customers.
In the Rest of Africa, the Zimbabwe results were impacted by the change in functional currency, which reduced revenue and Ebitda contributions.
The Democratic Republic of Congo business achieved positive Ebitda of R108m in a challenging market.
In Rwanda, the business achieved increased output, benefiting from the debottlenecking in the first half of the financial year.
The southern African cement and materials businesses experienced above inflation input cost pressures, mainly as a result of higher fuel costs, as well as once-off unplanned maintenance costs.
Taxation declined by 97percent to R6m in the current year, from R205m the previous year.
Gross debt increased from R4.68bn in March 2018 to R5bn at the end of March 2019.
Rand weakness increased gross debt by R630m.
In the materials business revenue increased by 7percent to R2.15bn from R2bn, and the business generated Ebitda of R140m as opposed to R192m in the prior period.
The board decided not to declare a dividend.
On Wednesday the group announced Roland van Wijnen, formerly of the international LafargeHolcim cement group, as the new chief executive, as Johan Claassen is taking early retirement.
* The reporter owns shares in PPC.