PPC said group cement sales volumes (including Zimbabwe) for the five months ended August 2022 were in line with the previous comparable period as subdued demand in South Africa and the impact of a maintenance-related kiln shutdown in Zimbabwe were offset by robust demand growth in Rwanda.
The group also said cash generation remains positive and the group reduced net debt from March 31, 2022 levels.
“For the five months ended August 2022, PPC’s group revenues, excluding Zimbabwe, which is impacted by hyperinflation accounting, increased by 9%, driven by robust demand in Rwanda,” the group said.
“The cement market in Zimbabwe continued to show robust high single-digit growth as a result of both residential construction and government-funded infrastructure projects,” PPC said.
PPC Zimbabwe implemented planned maintenance at the beginning of FY23 and recorded a 7% decline in cement sales volumes period-on-period.
However, the resumption of clinker manufacturing by PPC Zimbabwe at the end of May 2022 enabled improved sales volumes in the second quarter of FY23.
PPC Zimbabwe implemented US$ price increases of 5% in March 2022, 2% in April 2022 and a further 5% increase in August 2022.
PPC noted increased availability of foreign currency in the Zimbabwean economy, with more than 70% of cement sales during the period under review occurring in foreign currency.
PPC received a US$4.4 million dividend in June 2022 and anticipates an additional dividend to be declared upon the publication of PPC Zimbabwe’s interim results in November 2022.
In their outlook, PPC said, “Given the current economic climate, the group will continue to enhance operational efficiencies to mitigate the impact of rising input cost inflation. Without a significant increase in infrastructure investments, cement demand in South Africa is anticipated to remain subdued.
“PPC South Africa is well positioned to benefit from an increase in cement demand with additional capacity available to capture an upswing in demand without additional capex investment required.”
PPC Zimbabwe anticipates a recovery for the balance of the financial year and the outlook for CIMERWA remains positive – Harare