South Africa: PPC reports that its strategy to expand into the rest of Africa has started to bear fruit, despite continuing challenges in many markets. Johan Claassen, the chief executive of PPC said that the group's diversified portfolio had enabled the company to offset the weaker South African performance with robust growth in its rest of Africa segment.
"We are very pleased with our rest of Africa operations, which grew volumes by more than 34%, increased revenues by 36% to US$120m and improved earnings before interest, tax, depreciation and amortisation (EBITDA) by 18% to US$36.7m. "This performance was supported by robust volume growth in Zimbabwe and a positive contribution from the Democratic Republic of Congo (DRC),” said Claasen.
Claassen added that the first phase of PPC's Cimerwa plant upgrade in Rwanda, which involved de-bottlenecking the plant to increase production capacity, was successfully completed in the six months to September 2018 and that PPC began to realise the benefits towards the end of the reporting period when record volumes were achieved.
However, the revenue achieved by the Cimerwa plant declined to US$29.1m from US$31.9m in the prior period because of a 7% reduction in volumes. PPC’s Rwandan EBITDA slumped to US$6.7m from US$12.2m, because of unexpected maintenance associated with clinker imports costs. Claassen added that its operations in the DRC continued to encounter challenging market conditions, which were characterised by overcapacity and muted cement demand due to political uncertainty.