Subdued construction activity, higher imports cut PPC's sales volumes
JSE-listed cement producer PPC has reported difficult trading conditions for the nine months to December 31, 2018, with cement volumes down between 2% and 3%, against a backdrop of estimated market contraction of between 4% and 5%.
Total cement imports had increased by 80% during the period from January to November 2018, compared with the prior comparable period, with imports into Cape Town having increased by 48% to around 209 000 t, although it was still substantially lower than the imports into Durban, which increased by 84%.
The company had also engaged with authorities with regard to imports to ensure industry sustainability and also market stabilisation.
Meanwhile, PPC’s SURERANGE product line continued to gain traction and has positioned the company well against blended product and imports. The business continued to focus on achieving its R70/t profitability initiatives.
Pricing had been aligned with local inflationary increases. Nonetheless, recent policy announcements regarding fuel price increases had placed consumers in Zimbabwe under strain.
The fuel increases and cost of living increases afforded to PPC Zimbabwe employees was expected to impact on earnings before interest, taxes, depreciation and amortisation (Ebitda) margins by between 1% and 2%.
through focusing on local procurement, with 90% of input costs sourced locally; increasing exports to neighbouring countries; continuing clinker imports from South Africa; and share buy-backs of PPC shares listed on the Zimbabwe Stock Exchange.
In the Democratic Republic of Congo (DRC), PPC Barnet continued to operate in a challenging environment, especially during the December national elections, during which infrastructure demand remained subdued.
PPC was engaging with its lenders to restructure the debt in the DRC and put in place a more sustainable capital structure. http://www.engineeringnews.co.za/article/ppc-navigates-increased-imports-price-changes-in-2018-2019-02-05