PPC Zimbabwe poised for cement growth despite decline in its year to year volumes

By Leafias Mazviro

PPC Limited has managed to maintain profitability and a debt-free status despite facing a challenging operating landscape marked by power cuts, kiln maintenance shutdowns, and a decline in sales volumes,

This was revealed in the company’s latest trading statement for the financial year ending March 31, 2023.

According to the firm’s volumes year-on-year were down 16% despite robust cement demand from concrete product manufacturers and government-funded infrastructure projects.

“This is due to the impact of the planned kiln shut down for maintenance which took place in the first half of the year, which negatively impacted the performance.”

In addition, plant stoppages due to power interruptions negatively affected performance in the second half. PPC Zimbabwe has gradually recovered market share lost over this period and is well positioned to deliver strong volume growth going forward.

Revenue decreased by 19%, but PPC Zimbabwe was able to implement US$ price increases to cover input cost inflation and enhance margins. EBITDA declined by 7% to R365 million (March 2022: R393 million).

“PPC Zimbabwe is debt-free and had unrestricted cash holdings at 31 March 2023 of R118 million. PPC received US$8.8 million in dividends during the year, compared to US$6.2 million in the prior year. In rand terms, PPC received R147 million in the current year net of withholding taxes compared to R91 million in the prior period.”

The trading update showcases the operation’s resilience in navigating a challenging market environment while maintaining profitability and a strong balance sheet. The cement industry in Zimbabwe is poised for growth in the coming years due to strong demand from the housing and infrastructure sectors, as well as the industry’s cost competitiveness and potential for exports. With its solid financial position and strategic investments in production capacity, PPC Zimbabwe is well-positioned to ride on the envisaged growth and continue to generate value for its shareholders.

PPC limited is a company which produce cement around the African continent and is listed both on A2X Stock Exchange and Zimbabwe stock Exchange.

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