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PPC ACTIONS STRATEGIC PRIORITIES TO DELIVER STAKEHOLDER VALUE

PPC ACTIONS STRATEGIC PRIORITIES TO DELIVER STAKEHOLDER VALUE

- Earnings per share up 25% to 10 cents and headline earnings per share up 114% at 15 cents

- Net cash flow improved 69% to R1,4 billion

- Debt reduced by R900 million, maturity profile lengthened and interest rates lowered

- Strong performance from Rwanda and Zimbabwe plants

- New plants in Ethiopia and DRC operationalised and in ramp-up phase

Monday, 18 June 2018 – PPC Ltd. today announced its financial results for the year ended 31 March 2018. Optimising the capital structure, increasing free cash flow, operationalising new plants and ensuring long term sustainability and value creation were the key focus areas for the period.

Total cement sales volumes increased by 6% to 5,9 million tonnes, translating into group revenue growth of 7% to R10.3 billion. An increase in cost of sales as well as once-off costs relating to corporate action, the DRC and restructuring costs negatively impacted EBITDA. However, net profit attributable to PPC shareholders increased 60% to R149 million. Earnings per share improved 25% to 10 cents and headline earnings per share rose by 114% to 15 cents.

Johan Claassen, CEO commented: “The group has achieved key milestones in delivering on its FOH-FOUR strategic priorities that were introduced in 2017. These encompass the optimisation of the financial, operational and human capital of the group. Addressing these priorities has laid an important foundation that will enable us to create long-term sustainable value for stakeholders in future.”

“In particular, we have made good progress towards achieving our optimal capital structure. The focus on liquidity and capital management is paying off as we have improved free cash-flow generation and reduced our debt to be in line with our revised long-term gearing targets and lender covenants.”

Group net debt dropped from R4,7 billion to R3,8 billion while net debt to EBITDA improved from 2,3x to 2,0x. Net cashflow from operating activities increased by 69% to R1,4 billion owing to positive working capital movements totalling R411 million, a 9% reduction in finance costs and lower effective taxation rate.

The group restructured its South African debt over a longer term of between three to four years at lower effective interest rate costs of 10 – 11% and negotiated a two-year capital holiday for its DRC project funding debt.

“Our performance has been resilient against the backdrop of challenging environments. Zimbabwe and Rwanda, achieved a positive performance, contributing nicely to the group profitability, while the DRC and Ethiopian plants were commissioned late in the financial year and are in early ramp-up phase. The performance from southern Africa cement and materials was subdued while certain once off costs had an impact on our overall financial performance,” added Claassen.

The performance from the southern Africa cement division, which includes Botswana, was impacted by a contraction in volumes, although higher selling prices of 2,5% were achieved due to the focused route-to-market strategy. Pleasingly, volumes are estimated to be better than the overall market volume decline. The R50/tonne cost saving initiatives implemented during the financial year together with the ongoing rationalisation of head office, integration of Safika Cement as well as the modernisation of the Slurry complex are expected to deliver further cost benefits, in line with the three mega plant strategy.

Rwanda and Zimbabwe continued their strong performance, contributing well to group profits for the year. Zimbabwe grew its revenue by 33% supported by volumes increasing over 45%, setting new sales records. Rwanda grew revenue by 10% and volumes by 20% with its annualised capacity utilisation being above 65%. DRC and Ethiopia were in early stages of operation having been recently commissioned and therefore had a temporary drag on the group’s performance.

The materials division incorporating lime, aggregates and readymix, delivered a muted performance for the year as it faced reduced demand and increased competition in a low infrastructure investment environment.

“Tied to the achievement of our strategic priorities, we are working hard to entrench a performance driven culture across the business. As a first step in this regard, we have revised our values and brand proposition.”

“Additionally, in delivering on our brand promise of ‘strength beyond’ we are working with employees to enhance our employee value proposition with a view to retain talent and skills in the business,” added Claassen.

Locally, the environment is expected to remain challenging economically, but the business will continue to defend and maintain its leading position and competitive advantage by leveraging its footprint, scale and focus on efficiency. On the international front, strong demand is expected to be driven by Zimbabwe and Rwanda while the DRC and Ethiopian plants ramp up. The group has also completed its major capex investments which enhanced and modernised its plants.

“Management’s focus is firmly on delivering improved profitability and further improving free cash flow generation in the short term. This will be supported by reduced capex together with significantly lower interest rate charges, while considerable focus has been directed towards strategic and operational initiatives to ensure greater competitiveness and improved efficiencies in markets exhibiting lower growth,” concluded Claassen.

ENDS

Financial Communications Advisor:

Instinctif Partners Gift Dlamini

Mobile: +27 (82) 608 6587

This email address is being protected from spambots. You need JavaScript enabled to view it.

Louise Fortuin

Mobile: +27 (71) 605 4294

This email address is being protected from spambots. You need JavaScript enabled to view it.

About PPC Ltd

A leading supplier of cement, lime and related products in southern Africa, PPC has 11 cement factories and a lime manufacturing facility in six African countries including South Africa, Botswana, DRC, Ethiopia, Rwanda and Zimbabwe. The recent commissioning of PPC’s milling depot, located in Harare, Zimbabwe and new plants in the DRC and Ethiopia bring PPC’s capacity to around eleven and a half million tonnes of cement products each year, compared to 8 million tonnes in 2015.

As part of its strategy and long-term vision, PPC is expanding its operations in South Africa with the modernisation of its PPC Slurry complex outside Mafikeng in the North West province.

PPC’s Materials business, comprising of Pronto Holdings (including Pronto Building Materials, Ulula Ash and 3Q Mahuma Concrete), forms part of the company’s channel management strategy for southern Africa. PPC’s footprint in the readymix sector has grown to include 29 batching plants across South Africa and Mozambique and also has the capacity to produce half a million tonnes of fly ash. PPC also produces aggregates in South Africa and Botswana.

PPC Lime, one of the largest lime producers in the southern hemisphere, produces metallurgical-grade calcitic and dolomitic lime and sinter stone used mainly in the steel and related industries.

Follow PPC on Twitter @PPC_Africa, like us on www.facebook.com/PPC.Cement and visit us at www.ppc.co.za.

  • Published in News

PPC ACTIONS STRATEGIC PRIORITIES TO DELIVER STAKEHOLDER VALUE

PPC ACTIONS STRATEGIC PRIORITIES TO DELIVER STAKEHOLDER VALUE

- Earnings per share up 25% to 10 cents and headline earnings per share up 114% at 15 cents

- Net cash flow improved 69% to R1,4 billion

- Debt reduced by R900 million, maturity profile lengthened and interest rates lowered

- Strong performance from Rwanda and Zimbabwe plants

- New plants in Ethiopia and DRC operationalised and in ramp-up phase

Monday, 18 June 2018 – PPC Ltd. today announced its financial results for the year ended 31 March 2018. Optimising the capital structure, increasing free cash flow, operationalising new plants and ensuring long term sustainability and value creation were the key focus areas for the period.

Total cement sales volumes increased by 6% to 5,9 million tonnes, translating into group revenue growth of 7% to R10.3 billion. An increase in cost of sales as well as once-off costs relating to corporate action, the DRC and restructuring costs negatively impacted EBITDA. However, net profit attributable to PPC shareholders increased 60% to R149 million. Earnings per share improved 25% to 10 cents and headline earnings per share rose by 114% to 15 cents.

Johan Claassen, CEO commented: “The group has achieved key milestones in delivering on its FOH-FOUR strategic priorities that were introduced in 2017. These encompass the optimisation of the financial, operational and human capital of the group. Addressing these priorities has laid an important foundation that will enable us to create long-term sustainable value for stakeholders in future.”

“In particular, we have made good progress towards achieving our optimal capital structure. The focus on liquidity and capital management is paying off as we have improved free cash-flow generation and reduced our debt to be in line with our revised long-term gearing targets and lender covenants.”

Group net debt dropped from R4,7 billion to R3,8 billion while net debt to EBITDA improved from 2,3x to 2,0x. Net cashflow from operating activities increased by 69% to R1,4 billion owing to positive working capital movements totalling R411 million, a 9% reduction in finance costs and lower effective taxation rate.

The group restructured its South African debt over a longer term of between three to four years at lower effective interest rate costs of 10 – 11% and negotiated a two-year capital holiday for its DRC project funding debt.

“Our performance has been resilient against the backdrop of challenging environments. Zimbabwe and Rwanda, achieved a positive performance, contributing nicely to the group profitability, while the DRC and Ethiopian plants were commissioned late in the financial year and are in early ramp-up phase. The performance from southern Africa cement and materials was subdued while certain once off costs had an impact on our overall financial performance,” added Claassen.

The performance from the southern Africa cement division, which includes Botswana, was impacted by a contraction in volumes, although higher selling prices of 2,5% were achieved due to the focused route-to-market strategy. Pleasingly, volumes are estimated to be better than the overall market volume decline. The R50/tonne cost saving initiatives implemented during the financial year together with the ongoing rationalisation of head office, integration of Safika Cement as well as the modernisation of the Slurry complex are expected to deliver further cost benefits, in line with the three mega plant strategy.

Rwanda and Zimbabwe continued their strong performance, contributing well to group profits for the year. Zimbabwe grew its revenue by 33% supported by volumes increasing over 45%, setting new sales records. Rwanda grew revenue by 10% and volumes by 20% with its annualised capacity utilisation being above 65%. DRC and Ethiopia were in early stages of operation having been recently commissioned and therefore had a temporary drag on the group’s performance.

The materials division incorporating lime, aggregates and readymix, delivered a muted performance for the year as it faced reduced demand and increased competition in a low infrastructure investment environment.

“Tied to the achievement of our strategic priorities, we are working hard to entrench a performance driven culture across the business. As a first step in this regard, we have revised our values and brand proposition.”

“Additionally, in delivering on our brand promise of ‘strength beyond’ we are working with employees to enhance our employee value proposition with a view to retain talent and skills in the business,” added Claassen.

Locally, the environment is expected to remain challenging economically, but the business will continue to defend and maintain its leading position and competitive advantage by leveraging its footprint, scale and focus on efficiency. On the international front, strong demand is expected to be driven by Zimbabwe and Rwanda while the DRC and Ethiopian plants ramp up. The group has also completed its major capex investments which enhanced and modernised its plants.

“Management’s focus is firmly on delivering improved profitability and further improving free cash flow generation in the short term. This will be supported by reduced capex together with significantly lower interest rate charges, while considerable focus has been directed towards strategic and operational initiatives to ensure greater competitiveness and improved efficiencies in markets exhibiting lower growth,” concluded Claassen.

ENDS

Financial Communications Advisor:

Instinctif Partners Gift Dlamini

Mobile: +27 (82) 608 6587

This email address is being protected from spambots. You need JavaScript enabled to view it.

Louise Fortuin

Mobile: +27 (71) 605 4294

This email address is being protected from spambots. You need JavaScript enabled to view it.

About PPC Ltd

A leading supplier of cement, lime and related products in southern Africa, PPC has 11 cement factories and a lime manufacturing facility in six African countries including South Africa, Botswana, DRC, Ethiopia, Rwanda and Zimbabwe. The recent commissioning of PPC’s milling depot, located in Harare, Zimbabwe and new plants in the DRC and Ethiopia bring PPC’s capacity to around eleven and a half million tonnes of cement products each year, compared to 8 million tonnes in 2015.

As part of its strategy and long-term vision, PPC is expanding its operations in South Africa with the modernisation of its PPC Slurry complex outside Mafikeng in the North West province.

PPC’s Materials business, comprising of Pronto Holdings (including Pronto Building Materials, Ulula Ash and 3Q Mahuma Concrete), forms part of the company’s channel management strategy for southern Africa. PPC’s footprint in the readymix sector has grown to include 29 batching plants across South Africa and Mozambique and also has the capacity to produce half a million tonnes of fly ash. PPC also produces aggregates in South Africa and Botswana.

PPC Lime, one of the largest lime producers in the southern hemisphere, produces metallurgical-grade calcitic and dolomitic lime and sinter stone used mainly in the steel and related industries.

Follow PPC on Twitter @PPC_Africa, like us on www.facebook.com/PPC.Cement and visit us at www.ppc.co.za.

  • Published in News

Agrément South Africa officially launched as a Public Works entity

Public Works Minister Thulas Nxesi on Friday launched technical agency Agrément South Africa as a fully-fledged legal entity of the Department of Public Works (DPW). The entity was previously managed by the Council for Scientific and Industrial Research(CSIR). Agrément is tasked with conducting testing, performance and certification of construction industry products and methodologies to ensure quality and durability of such products on behalf of the DPW.

Agrément CEO Joe Odhiambo said a first focal point will be to eradicate pit toilets and contribute towards the creation of safer toilet infrastructurefor disadvantaged communities. The entity is also tasked with managing the South African Eco-Labelling System as government’s recognised system for building materials and products, which will be incorporated in the DPW’s standard specifications for construction works from next year. 

This will entail inspecting green building aspects including indoor air quality, comfort, environ-mental issues, and material and energy resource conservation. Nxesi said Agrement’s is not the same as the South African Bureau of Standards (SABS), which deals with subjects that have, or can be, standardised – typically products have been in use for a long enough time to be regarded as conventional by manufacturers and contractors.

Agrément comes onto the scene when a new product or process is developed outside the existing scope of SABS – and provides the necessary testing and certification to provide assurances that the product is fit-for-purpose. In the 2016/17 financial year, Agrément South Africa received 35 applications for certifications. Of those, 29 were awarded certificates. “Agrément will continue to undertake its mandate of carrying out the highly rigorous technical assessments of non-standardised construction-related products and buildingsystems.”

Agrément South Africa’s certificates are comprehensive advisory documents, intended to assist building authorities and other interested parties to decide, on technical grounds, whether a particular innovation will be suitable for a specified purpose in a given situation.

The certificate contains an objective assessment of the performance-in-use of the subject to allow designers and specifiers to acquaint themselves with its likely performance. Nxesi said: “I am watching carefully all the SOEs in terms of governance. A number have shown poor governance. Some SOEs have been recklessness; [taking] huge salaries for themselves and we will be watching.”

Meanwhile, Nxesi concluded that the technologies to be promoted by Agrément as new innovative technologies should rather draw on appropriate technology than ‘disruptive technology’.

  • Published in News

Atterbury harnesses innovation to unleash its power within

Atterbury recently launched its groundbreaking innovation platform to nurture new, inventive ideas. It has introduced AttNovate as a platform and incentive to harness innovative ideas from the staff within its group to improve its business.

The vision to channel “the power within” Atterbury through AttNovate began with Armond Boshoff, Atterbury Deputy CEO, who believes that innovative thinking is a necessary business skill that can, and should, be encouraged and developed. Armond recently completed a Masters degree of Business Administration (Cum Laude) from the University of Oxford and, upon his return to Atterbury, AttNovate was one of the first initiatives launched.

“We have amazing staff and because they know our business so well, they are in a great position to identify opportunities to improve, advance and evolve. Now, we are providing them a way to put their creative thinking into action. I believe there are already many innovative ideas within the business,” says Boshoff.

The AttNovate process is straightforward. Any employee can propose an idea, no matter how unusual or out-of-the-box, that they believe has real potential benefit for the business. There is no opening or closing date, the initiative is ongoing. Ideas are evaluated as they are submitted. Every idea presented and assessed to create value through innovation will receive a prize.

The big reward for Atterbury’s staff members comes in the form of sharing in the benefits stemming from their idea, with a monetary amount linked directly to the economic value creation that their innovation produces. “It inspires our employees to think creatively, whether their ideas are incorporated into the business or not. This way of thinking creates an even more stimulating and rewarding workplace and, thus benefitting our people and business overall,” highlights Boshoff.

AttNovate was presented to Atterbury personnel in mid-March and officially launched at the beginning of April. There are already several ideas being evaluated for implementation. Boshoff is particularly interested in new ways to make construction cheaper and faster while maintaining or improving quality. He’s eager to receive ideas that reduce operating expenses within Atterbury’s property assets, while creating an excellent experience for building users and upholding, or even extending, the property’s lifecycles.

“Says Boshoff: “AttNovate has ignited a new passion in our business and increased the level of engagement generated by staff. I’m sure it will spark many more great ideas and I’m fired up to see what our staff come up with next.”

More information at www.atterbury.co.za

  • Published in News
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