PPC results solid as cement despite Covid-19

23 Jul, 2021 - 00:07 0 Views
PPC results solid as cement despite Covid-19

eBusiness Weekly

Business Writer

Despite the challenging economic environment and the impact of COVID-19 related lockdown restrictions on sales, PPC Zimbabwe cement volumes increased by approximately 10 percent for the year ended 31 March 2021, supported by ongoing infrastructure projects.

According to parent Company PPC Limited, the positive sales momentum continued throughout the second half of FY21, albeit at a normalised rate.

In functional currency, PPC Zimbabwe’s revenues increased by 251 percent after the company implemented price increases in local currency to offset input cost inflation and the devaluation of the local currency.

In addition, the cement maker, actively managed its sales mix to ensure approximately 60 percent of its sales revenue is US dollar denominated.

“The informal sector contributed more to foreign currency sales, however, the sector was heavily impacted by the COVID-19 lockdown,” PPC said.

Cement sales in foreign currency allowed the company to remain self-sufficient.

In local currency, cement pricing was adjusted several times over the year to hedge against increased costs. A 3 percent price increase was realised in November 2020, followed by a further 3 percent increase in January 2021, the Company said.

In functional currency, EBITDA increased by 173 percent to $2.7 billion (March 2020: $994 million).

The cement maker said it remains well-positioned to benefit from industry and retail growth as the effects of COVID-19 are reduced.

Individual home building and other infrastructure projects are on the rise as government continues to avail funds for construction, it said.

Looking into the future of sales volume, the company said it had submitted a proposal to secure the national Batoka project in Zimbabwe.

“PPC aims to continue playing a significant role in national projects and hopes to secure the Batoka project.”

During the period under review, the Company also continued to supply the Hwange thermal power station and Beitbridge Border Post Renovation with product.

Away from operations, the business said it is financially self-sufficient and declared and paid a cash dividend to PPC of US$4,4 million in December 2020.

Subsequent to the year-end, a further dividend of US$2,6 million was paid to PPC.

The company which has about US$17 million under blocked funds said the Reserve Bank of Zimbabwe continues to honour its obligation to settle PPC Zimbabwe’s debt from legacy funds with a further US$11,2 million paid during FY21.

Management expects the debt to be fully repaid during the FY22 year.

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