SEPHAKU SWINGS INTO A LOSS AS CEMENT SALES CONTINUE TO DECLINE

Weak
economic conditions continue to weigh on the group, but it is cautiously
optimistic new civil projects will give it a boost in the next 12 months

Building and construction
materials group Sephaku Holdings (SepHold) said on Friday it was is cautiously
optimistic about the next 12 months after the commencement of several civil
construction projects.

The group, however, is expecting
an interim headline loss per share of between 3.36c and 4.37c to end-September,
compared with the prior period’s headline earnings per share of 12.59c.

The continued decline in concrete
sales volumes and flat pricing against inflationary cost increases resulted in
a significant decrease in its mixed concrete maker Métier’s net profit, the
company said.

That subsidiary is implementing a
strategy to geographically diversify plant footprint to maintain optimal sales
volumes and cost management initiatives to support profitability, the statement
read.

SepCem, its joint venture with
Dangote Cement, had seen a 19% decline in cement volumes to end-June, but had
seen a steady recovery in sales volumes after September, which has improved its
profitability.

“The group remains cautiously
optimistic about the next six to 12 months after the commencement of several
civil construction projects for the national road network rehabilitation and
water storage infrastructure,” SepHold said.

SepHold’s share price was unchanged at R1.30 on Friday morning, having fallen 27.78% year to date.https://www.businesslive.co.za/bd/companies/industrials/2019-11-08-sephaku-swings-into-a-loss-as-cement-sales-continue-to-decline/