By ETimes

Cement manufacturer PPC says its Zimbabwe operations continue to trade well and ahead of expectations despite the challenging macro-economic environment.

This comes at a time when demand for cement has increased following the increased activity in the economy in the form of infrastructure projects.

In the six months ended 30 September 2021, PPC Zimbabwe’s cement sales volumes rose 19% year-on-year.

“This was due to retail demand, increased sales to concrete product manufacturers and support from government funded projects,” said the company in a trading update. Relative to the comparable period in 2019, cement sales volumes increased by 31%.

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Revenue surged by 55% to R1.239 million from R797 million in the comparative period buoyed by the increase in cement sales.

“PPC Zimbabwe adjusted selling prices upwards in local currency to reflect input cost inflation.”

EBITDA declined by 12% to R287 million from R326 million with a reduced EBITDA margin of 23% compared to 41% in the previous period.

“EBITDA was negatively impacted by additional costs incurred in the importation of clinker to offset the impact of a planned and unplanned kiln shut down during the period. Furthermore, the kiln shut down resulted in higher maintenance costs.

“The rand strengthened significantly by some 83% against the ZWL compared to the prior period and this negatively impacted the rand EBITDA. In its functional currency (pre-hyperinflation) EBITDA increased by 26%,” it said.

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It said PPC Zimbabwe is financially self-sufficient and is focused on cash preservation and maximising US$ EBITDA given the prevailing economic conditions.

“Further, the Reserve Bank of Zimbabwe continues to honour its obligation to settle PPC Zimbabwe’s debt from legacy funds. Management expects the debt to be fully repaid during FY22,” added the company

During the period under review, a further dividend of US$3 million was declared of which US$2.7 million was received by PPC  Harare

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