PPC has posted its financial statements for the year ended March 2024, reporting a 20.6% increase in its revenue to R10 058 million (FY2023: R8 339 million) driven primarily by a strong performance in its Zimbabwean operation.
Its South African and Botswana cement revenues increased marginally by 5.2% driven by price increases and increased sales of clinker to Zimbabwe which partially offset the declining cement sales volumes. Revenue from the materials businesses declined 6% relative to the prior year.
Group cost of sales increased 16.3% to R8 409 million (FY2023: R7 231 million), all of which is attributable to Zimbabwe with the SA and Botswana group’s cost of sales declining marginally by 1.3% (R73 million), driven by lower sales volumes. Group administration and other operating expenditure increased by 5.5% with the Group earnings before interest, taxes, depreciation, and amortization (EBITDA) improving to 12.3% (FY2023: 10.7%).
PPC’s trading profit increased by R502 million to R619 million. Of the R502 million increase, R395 million was attributable to Zimbabwe.
EBITDA increased by 38.6% to R1 242 million (FY2023: R896 million) with its EBITDA margin up 1.6% points to 12.3% (FY2023: 10.7%).
Depreciation for the group decreased by R155 million to R623 million (FY23: R778 million). The most material contributors to the decrease were PPC Zimbabwe and SA and Botswana cement. Due to the change in the functional currency for PPC Zimbabwe from the ZWL to the United States dollars (US$), hyperinflation accounting is no longer applicable, which resulted in a decrease in property, plant and equipment and an associated decrease in depreciation by R86 million. SA and Botswana cement also had a decrease in depreciation of R57 million, mainly due to the extension of useful lives of certain of the assets.
The Group’s free cash flow before financing activities (and excluding disposal proceeds from the sale of CIMERWA) sits at R260 million (FY2023: R124 million).
The Group’s board resolved to declare a gross cash dividend of R213 million (FY2023: share repurchase of R200 million) equating to 13.7 cents per share.
“The group has faced sustained underperformance and decreasing profitability over a number of years and as I reflect on my time at PPC over the past seven months, the comprehensive review of the business revealed internal gaps that are also clear opportunities,” comments PPC CEO, Matia Cardarelli.
“As we look to unlock internal value and drive profitability, the new Exco and I have had to challenge past assumptions and leadership decision-making practices. Our problems are pressing, and it is clear that a meaningful organisational reset and tough decisions are necessary for PPC’s sustainable future.”
“Where we are failing, where we are missing opportunities and what our strengths are, were some of the questions posed in the design of the turnaround fundamentals. Through a “back to basics” approach and an appropriate focus on operational efficiency, we are looking into our commercial footprint, internal business intelligence data and reliability, logistics model, organisational structure and cost and capital expenditure discipline.”
“We need to rely on a strong set of values: integrity, sense of urgency, safety, agility and cost consciousness – values that speak to our aspirations. Moreover, we want to outline behaviours that demonstrate these values in a ‘walk-the-talk’ approach. By refocusing the organisation on its core business, fostering a no-nonsense, get-things-done approach, and implementing agility in decision-making processes, I am confident that we can overcome the challenges ahead.”
