Oliver Kazunga Senior Business Reporter
ZIMBABWE will remain a key area of focus as leading cement manufacturer Pretoria Portland Cement (PPC) restructures its portfolio in Africa to concentrate on southern Africa following a recent agreement to dispose of the South African group’s 51 percent shareholding in Rwanda.
In a statement accompanying financial results for the half year ended September 30, 2023, the group on November 17, 2023, concluded a US$42,5 million agreement to dispose of its 51 percent stake in CIMERWA (Rwanda).
“Reaching an agreement to dispose of PPC’s 51 percent stake in CIMERWA is an important step in PPC’s strategy of focusing on its core southern African markets.
“The key focus for PPC will remain on its southern African businesses, including South Africa, Botswana and Zimbabwe.
“This includes continuing to improve its profitability and enhance returns through further operational efficiencies and cost containment measures,” said the group.
PPC said following a strong recovery in market share and profitability of PPC Zimbabwe in the current period, the company anticipated at least maintaining these gains.
During the reporting period, PPC Zimbabwe saw a strong recovery in all its key metrics.
“Zimbabwe continued to win back market share it had lost during the planned extended kiln shutdown in the first half of the prior year.
“Cement sales volumes increased 44 percent mainly due to improved clinker availability for production, increased local demand, a reduction in imports and a soft base in the prior comparative numbers due to the extended shutdown.
“PPC Zimbabwe changed its functional currency to US dollar and reporting has therefore been simplified as hyperinflation accounting is no longer applicable,” said PPC.
“The rand depreciated by 14,9 percent to the US dollar when compared to the prior comparative period, bolstering the Zimbabwean overall performance when reported in South African rands.”
In the half-year period, the group’s net debt declined to R381 million (September 2022: R677 million) from R765 million on March 31, 2023 due to strong cash generation as cash balances remain relatively high at R640 million (September 2022: R766 million) when compared to the March 31, 2023 balance of R424 million.
“Net debt for South Africa and Botswana group improved by R195 million (R70 million since FY23) to R730 million (H1 FY23: R925 million) and gross leverage levels remain below the target range of 1,3 – 1,5 x last twelve month’s EBITDA.
“Zimbabwe remains debt-free and had unrestricted cash holdings at September 30, 2023 of R226 million up from R118 million at March 31, 2023 (September 2022: R253 million).
“Some 99,5 percent of PPC Zimbabwe’s cash is held in hard currencies. Zimbabwe declared and paid a US$4 million dividend during the current period and declared a further US$7 million dividend in November 2023,” said the group. – The Herald
