PPC earnings 114.3c vs 20.3c

Posted On Tuesday, 11 May 2010 02:00 Published by eProp Commercial News
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PPC has reported diluted headline earnings per share of 114.3c for the 6 months ended march 2010 from 20.3c a year ago.

Paul Stuiver  Pretoria Portland Cement (PPC) on Tuesday reported diluted headline earnings per share of 114.3 cents for the six months ended march 2010 from 20.3 cents a year ago.

Excluding BBBRR IFRS2 chares, diluted HEPS were 115.3 cents from 105 cents previously.

HEPS excluding the IFRS 2 charges relating to the previous year's BBBEE transaction increased by 10% to 116 cents per share, while including the impact of the BBBEE transaction, HEPS increased by 465% to 115 cents per share.

Group revenue increased by 5% to R3.421 billion and EBITDA increased by 4% to R1.296 billion.

Cash generated from operations increased by 7% to R1.097 billion reflecting a continued focus on operating efficiencies and working capital management.

Operating profit, excluding IFRS 2 charges for the previous year's BBBEE transaction, rose 2% to R1.125 billion.

Administration and operating expenditures showed a significant increase over last year, mainly attributable to the consolidation of PPC Zimbabwe's overheads, the SAP ERP implementation and increased spending on cement marketing initiatives.

An unchanged interim dividend of 45 cents per share was declared and the company said it expects to maintain dividend cover for the full year in the stated range of 1.2 to 1.5 times.

CEO Paul Stuiver said "PPC has produced a good set of results by increasing revenue, profitability and operating cash flow in a difficult economic environment.

While the contributions from our Zimbabwean cement operations and the Lime and Aggregates divisions improved significantly, South African cement demand continued to decline and we remain concerned over the outlook for cement demand in the second half".

PPC's cement volumes in South Africa and Botswana declined by 15%, mainly due to a continued decline in residential building activity and a lack of new construction and infrastructure projects.

The Western Cape and Gauteng provinces recorded the most significant reductions. In response to lower demand, PPC has focused on optimising production and product distribution costs.

PPC Zimbabwe's local and export cement sales increased to 35 000 tons per month compared to 10 000 tons per month during the same period last year.

Operating conditions were still hampered by numerous electricity load shedding interruptions.

Lime volumes improved by more than 30% as demand from the steel and alloys markets continued to recover.

This resulted in an increase in operating profit to R80 million from 2009's R31 million.

The steel industry's positive outlook for the steel and alloy volumes during the remainder of 2010 should result in a continued strong performance by the Lime division, albeit at a slower rate than experienced during the first half, he said.

Looking ahead, Struiver said economic indicators are currently mixed and economic recovery in the region appears fragile and uncertain.

The South African government's commitment to infrastructural development is encouraging but commencement of new construction projects is taking longer than anticipated.

This, together with the effects of the World Cup, makes the forecasting of cement demand during the remainder of 2010 extremely difficult.

However it is likely that South African cement demand during 2010 will be lower than during 2009.

The contribution of PPC Zimbabwe is also difficult to forecast as the situation in the country remains transient, he said.

Cement pricing is expected to remain under pressure for the remainder of the year with excess industry capacity and a strong local currency limiting pricing power.

"Under these circumstances we will continue to focus on operational performance and the running of our most efficient production units to minimise the impact of reduced volume and increasing energy costs.

"We will also ensure that the company will be ready to capitalise on increased demand when the anticipated economic recovery eventually materialises.

"The strategy to expand the business beyond its existing geographical boundaries will continue to receive significant management attention," he concluded.

 

Last modified on Thursday, 03 October 2013 16:27
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