PPC: ‘Good results in a challenging year’

South African cement manufacturer Pretoria Portland Cement (PPC) on Monday reported an 8% rise to 283 cents in its headline earnings per share for the year ended September 2008.

A final dividend of 180 cents was declared.

Revenue rose 12% to R6,2-billion and operating profit increased 7% to R2,3-billion.

“These are good results in a challenging year,” said John Gomersall, PPC CEO, despite input costs such as fuel, coal and electricity escalating “alarmingly” in the second half of the year.

PPC, which derives more than 90% of revenues from cement operations, said regional cement volumes declined marginally by 1,6% after seven consecutive years of strong growth.

“This was due mainly to the continued drop in demand from the formal residential sector but, in spite of the delays in commencement of many infrastructure projects, demand from that sector virtually offset the residential market decline,” said Gomersall.

The Batsweledi capacity expansion at Dwaalboom was commissioned in the last week of September, within budget and achieved warranted output during a five-day test in the first month of production, the group said.

Looking ahead, Gomersall said the group has examined different scenarios for cement demand in the year ahead, ranging from modest to negative growth and that it has action plans in place that would be implemented as appropriate.

“We expect cement demand for rural and affordable housing to continue as government plans to eliminate the backlog of almost three million houses by 2014. Additionally, we will optimise our production units, benefiting from the additional output and lower production cost of the new Dwaalboom kiln 2 and we should therefore be able to supply all regional demand without the need for imports. We will also resume supplying our traditional export markets,” he said. — I-Net Bridge

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Tiisetso Motsoeneng
Tiisetso Motsoeneng works from Johannesburg. Deputy Editor: Business Day in Johannesburg, home to Africa’s deepest capital market. Tiisetso Motsoeneng has over 285 followers on Twitter.

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