PPC to report higher earnings, driven by strong growth in Zimbabwe operation

Infrastructure, home building driving PPC Zim

Cement producer PPC Africa expects a 20% increase in earnings for the year ending in March, driven by strong performance from its Zimbabwe operations.

An extended shutdown of PPC Zimbabwe’s kiln hurt annual profits last year, but recovery in the past year will drive headline earnings per share by 20%, swinging back from a group loss last year, PPC said in a notice on the Johannesburg Stock Exchange on Wednesday.

“This difference is primarily due to the current period EPS and HEPS numbers being impacted by a strong performance by PPC Zimbabwe in the current period compared to the prior period in which it had an extended kiln shutdown,” PPC says.

PPC is now accounting for Zimbabwe in US dollars, which gets rid of hyperinflation accounting, which resulted in a net monetary losses of R131-million in last year’s results.

Zimbabwe is one of PPC’s best-performing markets, and the company has decided to retain the unit at a time it has been restructuring its businesses. Last year, PPC sold its 51% stake in Rwandan business CIMERWA for $42.5 million. The cement maker entered that market in 2013 and has been selling its rest-of-Africa businesses to focus on its core SA operation. 

In the 10 months to January, PPC Zimbabwe grew volumes by 41% in the current period, which the company attributed to “residential construction and government-funded infrastructure projects” as well as restrictions on imports.

PPC Zimbabwe delivered dividends of US$4 million in July 2023 and US$ 7 million in November 2023. The next dividend declaration is expected in July 2024.