Sephaku comes unstuck in hard market


Sephaku comes unstuck in hard market


Published Date: 2019-11-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sephaku comes unstuck in hard market

The cement producer says competitors have engaged in aggressive market tactics and it has also had to contend with rising imports.

Sephaku has swung to a half-year loss as its competitors fight for a bigger share of a declining market. The cement producer says falling investment in infrastructure has maintained pressure on the building materials industry. And it's also had to compete against cheap imports.

Volumes declined by close to 10% in the six months to end-September due to low demand, particularly in KwaZulu-Natal, where several big construction projects were suspended. However, it said Its Métier subsidiary continued to identify new demand nodes in KZN and Gauteng.

Revenue fell 9% to R426 million for the period and it recorded a net loss of R7.7 million, down from a R26.5 million profit last year. That resulted in a loss per share of 3.7c and a headline loss of 4.11c per share. However, its net asset value increased slightly to 518.51c per share.

Métier reported a 62% slide in net profit, while associate SepCem, in which it holds a 36% stake, reported a net loss of R21.6 million.

With cement imports projected to increased to over 1 million tonnes this year, Sephaku said the industry had applied for safeguard protection tariffs with the International Trade Administration Commission (ITAC) against all imports of cement and clinker.

The group said it was currently concluding a proposed rights issue which would help relieve Métier's high debt.

Its shares closed unchanged at R1.25 yesterday.


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