18 June 2018


– Earnings per share up 25% to 10 cents and headline earnings per share up 114% at 15 cents

– Net cash flow improved 69% to R1,4 billion

– Debt reduced by R900 million, maturity profile lengthened and interest rates lowered

– Strong performance from Rwanda and Zimbabwe plants

– New plants in Ethiopia and DRC operationalised and in ramp-up phase

Monday, 18 June 2018 – PPC Ltd. today announced its financial results for the year ended 31 March 2018. Optimising the capital structure, increasing free cash flow, operationalising new plants and ensuring long term sustainability and value creation were the key focus areas for the period.

Total cement sales volumes increased by 6% to 5,9 million tonnes, translating into group revenue growth of 7% to R10.3 billion. An increase in cost of sales as well as once-off costs relating to corporate action, the DRC and restructuring costs negatively impacted EBITDA. However, net profit attributable to PPC shareholders increased 60% to R149 million. Earnings per share improved 25% to 10 cents and headline earnings per share rose by 114% to 15 cents.

Johan Claassen, CEO commented: “The group has achieved key milestones in delivering on its FOH-FOUR strategic priorities that were introduced in 2017. These encompass the optimisation of the financial, operational and human capital of the group. Addressing these priorities has laid an important foundation that will enable us to create long-term sustainable value for stakeholders in future.”

“In particular, we have made good progress towards achieving our optimal capital structure. The focus on liquidity and capital management is paying off as we have improved free cash-flow generation and reduced our debt to be in line with our revised long-term gearing targets and lender covenants.”

Group net debt dropped from R4,7 billion to R3,8 billion while net debt to EBITDA improved from 2,3x to 2,0x. Net cashflow from operating activities increased by 69% to R1,4 billion owing to positive working capital movements totalling R411 million, a 9% reduction in finance costs and lower effective taxation rate.

The group restructured its South African debt over a longer term of between three to four years at lower effective interest rate costs of 10 – 11% and negotiated a two-year capital holiday for its DRC project funding debt.

“Our performance has been resilient against the backdrop of challenging environments. Zimbabwe and Rwanda, achieved a positive performance, contributing nicely to the group profitability, while the DRC and Ethiopian plants were commissioned late in the financial year and are in early ramp-up phase. The performance from southern Africa cement and materials was subdued while certain once off costs had an impact on our overall financial performance,” added Claassen.

The performance from the southern Africa cement division, which includes Botswana, was impacted by a contraction in volumes, although higher selling prices of 2,5% were achieved due to the focused route-to-market strategy. Pleasingly, volumes are estimated to be better than the overall market volume decline. The R50/tonne cost saving initiatives implemented during the financial year together with the ongoing rationalisation of head office, integration of Safika Cement as well as the modernisation of the Slurry complex are expected to deliver further cost benefits, in line with the three mega plant strategy.

Rwanda and Zimbabwe continued their strong performance, contributing well to group profits for the year. Zimbabwe grew its revenue by 33% supported by volumes increasing over 45%, setting new sales records. Rwanda grew revenue by 10% and volumes by 20% with its annualised capacity utilisation being above 65%. DRC and Ethiopia were in early stages of operation having been recently commissioned and therefore had a temporary drag on the group’s performance.

The materials division incorporating lime, aggregates and readymix, delivered a muted performance for the year as it faced reduced demand and increased competition in a low infrastructure investment environment.

“Tied to the achievement of our strategic priorities, we are working hard to entrench a performance driven culture across the business. As a first step in this regard, we have revised our values and brand proposition.”

“Additionally, in delivering on our brand promise of ‘strength beyond’ we are working with employees to enhance our employee value proposition with a view to retain talent and skills in the business,” added Claassen.

Locally, the environment is expected to remain challenging economically, but the business will continue to defend and maintain its leading position and competitive advantage by leveraging its footprint, scale and focus on efficiency. On the international front, strong demand is expected to be driven by Zimbabwe and Rwanda while the DRC and Ethiopian plants ramp up. The group has also completed its major capex investments which enhanced and modernised its plants.

“Management’s focus is firmly on delivering improved profitability and further improving free cash flow generation in the short term. This will be supported by reduced capex together with significantly lower interest rate charges, while considerable focus has been directed towards strategic and operational initiatives to ensure greater competitiveness and improved efficiencies in markets exhibiting lower growth,” concluded Claassen.


Financial Communications Advisor:

Instinctif Partners Gift Dlamini

Mobile: +27 (82) 608 6587

[email protected]

Louise Fortuin

Mobile: +27 (71) 605 4294

[email protected]

About PPC Ltd

A leading supplier of cement, lime and related products in southern Africa, PPC has 11 cement factories and a lime manufacturing facility in six African countries including South Africa, Botswana, DRC, Ethiopia, Rwanda and Zimbabwe. The recent commissioning of PPC’s milling depot, located in Harare, Zimbabwe and new plants in the DRC and Ethiopia bring PPC’s capacity to around eleven and a half million tonnes of cement products each year, compared to 8 million tonnes in 2015.

As part of its strategy and long-term vision, PPC is expanding its operations in South Africa with the modernisation of its PPC Slurry complex outside Mafikeng in the North West province.

PPC’s Materials business, comprising of Pronto Holdings (including Pronto Building Materials, Ulula Ash and 3Q Mahuma Concrete), forms part of the company’s channel management strategy for southern Africa. PPC’s footprint in the readymix sector has grown to include 29 batching plants across South Africa and Mozambique and also has the capacity to produce half a million tonnes of fly ash. PPC also produces aggregates in South Africa and Botswana.

PPC Lime, one of the largest lime producers in the southern hemisphere, produces metallurgical-grade calcitic and dolomitic lime and sinter stone used mainly in the steel and related industries.

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