| Tue 30 Oct 2007, 9:02 | | PPC - Pretoria Portland Cement Company Limited - S |
|
PPC
PPC
PPC - Pretoria Portland Cement Company Limited - Sustained cement demand growth
delivers solid PPC performance
Pretoria Portland Cement Company Limited
(Incorporated in the Republic of South Africa)
(Company registration number 1892/000667/06)
JSE code: PPC
ISIN: ZAE000096475
Sustained cement demand growth delivers solid PPC performance
Highlight of financial results:
*10% growth in cement sales volumes
*Revenues up 19% to R5.6 billion
*Headline earnings per share up 16% to 263 cents
*Cash generated from operations up 8% to R2.2 billion
*Batsweledi expansion project within budget and on time with commissioning
planned for 2nd calendar quarter 2008
*Final dividend of 166 cents per share and special dividend of 61 cents per
share
Sustained economic growth and strong performance within the residential and non-
residential construction sectors is fuelling a continued appetite for cement
according to Pretoria Portland Cement Limited (PPC). The company released their
results for the year ended 30 September today.
Commenting on the results John Gomersall, chief executive officer of PPC said:
"We are pleased with another good set of results on the back of continued growth
in cement volumes. Regional cement sales volumes grew 10% over the last year and
as a result our operations ran at high utilization levels to meet customer
demand."
The buoyant market conditions necessitated the import of cement by PPC,
accounting for approximately 5% of total sales, to meet customer demand during
the financial year.
"We remain focused on maximising our efficiencies, though this has not been
without its challenges due to increased energy, transport and maintenance costs,
," said Gomersall.
Group revenue for the year increased 19% to R5,6 billion, while operating profit
rose 17% to R2,2 billion and headline earnings per share increased by 16% to 263
cents a share. Cash generated from operations increased by 8% to R2,2 billion.
Gomersall pointed out that strong cash flows and the current low level of
borrowings relative to interest and EBITDA cover ratios would enable the company
to take on higher levels of debt going forward to fund expansion projects.
Capital expenditure of R953 million (2006: R396 million) related mainly to the
Batsweledi expansion.
"We are on track for the commissioning of the new capacity at Batsweledi early
next year which should result in less reliance on imports to meet the higher
demand. Additional inland cement milling capacity will also come on stream mid
2009 on completion of the new milling facilities at the Hercules factory in
Pretoria," said Gomersall.
"The feasibility study of capacity requirements in the Western Cape is
progressing well but has been delayed by the environmental impact assessment and
regulatory approval process. Specification of equipment and plant layout has
continued and the delay is not expected to impact on our ability to supply the
cement demand in this region over the medium-term," added Gomersall.
The PPC Board approved the principles of the structure and likely funding of the
BBBEE empowerment transaction announced at the Annual General Meeting in
January 2007. The structure will include equity ownership by employees,
communities and industry associations via various trusts, and a number of
strategic black partners.
"We set ourselves a tight deadline of 30 September for the completion of the
total deal and significant progress has been made. We are in the final phase of
concluding the transaction and anticipate seeking shareholder approval early
next year.," said Gomersall.
Looking ahead, Gomersall said, "despite recent interest rate hikes, we believe
that growth in low-cost housing projects and the rapidly expanding
infrastructural construction acitivity will offset any residential slowdown. We
therefore expect continued demand growth in the year ahead and with our
incremental cement capacity coming online in the second half of 2008 we are
confident about achieving another improved performance next year."
The directors have reviewed and amended the target dividend cover to a range of
1.2 to 1.5 times. In addition, in any given year, the directors will consider an
additional distribution to the shareholders of cash that is surplus to
requirements.
The company has declared an increased final dividend of 166 cents per share
(2006: 110 cents per share) and a special dividend of 61 cents per share (2006:
77 cents per share), effectively distributing all the current year`s earnings.
ssued by: College Hill
Contact: Jacques de Bie
+27 11 447 3030
+27 82 691 5384
On behalf of:Pretoria Portland Cement Company Limited
Contact: John Gomersall Orrie Fenn
+27 11 386 9015 +27 11 386 9069
30 October 2007
Sponsor: J.P.Morgan Equities Limited
Date: 30/10/2007 09:02:49 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
