Pretoria Portland Cement Co. Ltd Reports 104% Increase in Zimbabwe Revenue after Switching to US Dollar as Functional Currency

Published On: December 11, 2023Company: Pretoria Portland Cement Co. Ltd (PPC.zw)
What was the significant development at PPC Zimbabwe and how did it contribute to overall group performance?
PPC Zimbabwe switched to the US dollar as its functional currency which simplified reporting as hyperinflation accounting is no longer applicable. Its revenue increased by 104% in rand terms to R1 743 million, contributing to the overall performance of the group. It also declared a US$4 million dividend and plans a further US$7 million payout in November 2023.

Summary:

  • Despite a weak macro environment, Pretoria Portland Cement Company Ltd (PPC) experienced a 20.9% increase in Group revenue to R6 172 million.
  • Group costs, although increased, grew at a smaller rate than revenue, which in combination with the decrease in other operating expenses, resulted in a significant operating profit of R675 million.
  • The company saw an expansion of margins in all markets except Rwanda and a significant recovery of market share in Zimbabwe.
  • PPC Zimbabwe, which switched to the US dollar as its functional currency, declared a US$4 million dividend and plans a further US$7 million in November 2023.
  • The cement sales volumes in South Africa and Botswana were down by 4.7% as compared to the previous year due to a decline in coastal sales.
  • South African and Botswana cement revenue increased by 4.7% to R3 158 million despite a decrease in sales volume, primarily due to price increases.
  • A decrease in sales volume of readymix and aggregates was observed, but the sector still managed to turn a profit due to cost reduction measures.
  • PPC Zimbabwe saw a significant recovery in sales volumes and PPC Rwanda experienced a sales volume increase of 11.9%.
  • The appointment of Matias Cardarelli as the incoming CEO of PPC was announced; he is expected to start during the quarter ending 31 December 2023.
  • PPC’s focus will continue to be on its southern Africa businesses which include South Africa, Botswana, and Zimbabwe. The company also intends to improve profitability through operational efficiencies and cost containment.

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About Pretoria Portland Cement Co. Ltd (PPC.zw)

Portland Holdings Limited, trading as PPC Zimbabwe, manufactures and markets quality cement and cement by-products for the construction industry in Zimbabwe, producing up to 1.8 million tons of cement per annum. Established in 1913, PPC Zimbabwe supplies customers in Zimbabwe, Botswana, Zambia and Mozambique. The company has three manufacturing plants that are regarded as the most modern operations in southern Africa; located in Colleen Bawn, Bulawayo and Harare. The company has interests in limestone mining, and manufacturing and distributing metallurgical-grade limestone, burnt lime and burnt dolomite; as well as the supply of ready-mix concrete, dry mortars and fly ash. Well-known PPC products available in Zimbabwe include SureBuild, Sureroad, Unicem and PMC. PPC Zimbabwe is listed on the Zimbabwe Stock Exchange

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