Cement producer PPC reported a record revenue contribution of 28% from its Africa operations during the interim period to March 31, 2015, and CEO Darryll Castle indicated that the contribution from the rest of the continent should continue to rise amid difficult South African trading conditions.
The JSE-listed group reported mixed results for the period. Sales volumes rose 5%, revenue increased by 9% to R4.5-billion and costs were contained.
However, selling prices declined in South Africa and profit for the period fell 43% to R281-million, with headline earnings slumping to 60c a share from 96c a share.
Strong demand from PPC’s African businesses helped offset lower demand from the South African business, with the group forecasting subdued conditions in its home market for the remainder of the financial year.
To mitigate the effects of the weaker South African market, PPC confirmed that it would be pursuing a R400-million profit improvement programme, which would have a strong focus on revenue optimisation, strategic cost reductions and operational efficiencies.
“We still think that the African contribution will rise to in the region of 40% by 2017,” Castle said. The group has a “watching brief” on opportunities across the continent.
However, owing to a significant debt burden, PPC was unlikely to pursue any new green field or brownfield projects in the rest of Africa until 2017.
