PPC’s R1bn empowerment deal boosts balance sheet

07 February 2017

JSE-listed PPC’s balance sheet has shown significant improvement following the conclusion of its first broad-based black economic-empowerment (BBBEE) transaction.

The BBBEE transaction resulted in a cash inflow of R1-billion in December, which PPC says will be used to further reduce its debt and fund capital expenditure, in particular, at the R1.7-billion Slurry Kiln 9 project, in Lichtenburg, North West.

The project is about 54% complete.PPC further reported this week that, despite strong cement volume growth in the Western Cape, its overall cement sales volumes in South Africa had declined marginally in the fourth quarter of 2016.

“Gauteng and other inland areas have experienced high single-digit declines in cement sales volumes for the three months to December 31, owing to selling price increases that were implemented in October,” it said in a statement.

However, for the nine months to December 31, PPC’s overall cement sales volumes in South Africa increased by 4% and the average selling prices decreased by 4%.The business units in Zimbabwe, Rwanda and Botswana, collectively recorded cement sales volume increases of 9% for the nine-month period to December 31.

Following the commissioning of the mill in Harare, cement sales volume performance, which had been trending lower, showed an improvement.

The steady ramp-up in Rwanda also continues, with 230 000 t of cement sales recorded for the nine-month period to December 31.On the back of increased sales promotions, cement sales volumes in Botswana have shown a 12% growth for the three months to December 31.

Meanwhile, the performance of PPC’s lime division continues to be negatively affected by the local steel and alloys industries, while volumes in the aggregates and ready mix division continue to show growth on the back of the recent acquisition of 3Q Mahuma Concrete.

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