PPC bemoans lack of infrastructure projects

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PPC bemoans lack of infrastructure projects

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Published Date: 2018-02-05 | Source: Stephen Gunnion | Author: Stephen Gunnion

PPC bemoans lack of infrastructure projects

While Southern African volumes are under pressure, it's growing volumes in Zimbabwe, Rwanda and DRC

PPC says the lack of infrastructure projects in the country continue to hamper demand for cement, leading to a fall in demand of between 3% and 4% last year. In a nine-month operational update, the cement producer says it's also taking measures to mitigate the impact of the drought in the Western Cape while ensuring continued supply to the province.

The company says revenue for the period is up, helped by an overactive overall selling price increase of 2% in its Southern African operations, while volumes in Rwanda and Zimbabwe continue to grow strongly. In the Democratic Republic of Congo, monthly sales have also tracked progressively better since last September as it gains market share.

Related article: PPC gets breathing room on DRC debt

It says its Materials business also continues to experience challenging trading conditions, with pressure on volumes and selling prices for Lime due to its exposure to the steel industry. Aggregates and Readymix was negatively impacted by a competitive construction environment exacerbated by a lack of construction projects in Gauteng and surrounding areas.

PPC says earnings before interest, tax, depreciation and amortisation (EBITDA) have also tracked ahead of the previous year, although corporate action and other costs have had an impact. The group has fended off a number of takeover and merger proposals over the past six months.

It says it expects to conclude negotiations around the refinancing and restructuring of its South African debt maturing in June by the end of March.

PPC's shares fell 7.62% to R7.15 on Friday.



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