PPC forecasts rock-solid results


PPC forecasts rock-solid results

Published Date: 2019-06-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

PPC forecasts rock-solid results

The cement producer says debt is down and headline earnings will be at least a third higher.

PPC's shares jumped as much as 9.7% on Friday after it told shareholders that its full-year profit would rise by at least a third.

In a trading statement, the cement producer said earnings before interest, tax, depreciation and amortisation (EBITDA) for the year to end-March would be flat to 7% higher than the R1.88 billion it reported last year. Basic earnings per share (EPS) are expected to rise by between 70% and 90% from 10c previously, while headline EPS are likely to be 33% to 53% higher. Headline EPS are seen as the main gauge of profitability.

The metrics suggest that the second half of PPC's financial year was significantly stronger than the first half when EBITDA declined by 13% and headline EPS were 11% higher. Its operations outside of South Africa made up for a weak performance locally in the six months to end-September, with Zimbabwe delivering improved profitability, Rwanda producing record volumes of cement and its business in the Democratic Republic of Congo also contributing to both revenue and EBITDA growth.

Significantly, the group said its gross debt had also decreased from the levels reported at the end of September. At the end of its 2018 financial year, the group had reduced its net debt to R3.8 billion, resulting in a big drop in finance charges.

The results are scheduled for release on Wednesday. Its shares pared some of their gains to close 3.3% higher at R5.03.

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