| Tue 12 May 2009, 7:20 | | PPC - Pretoria Portland Cement Company Limited - Unaudited Interim Results For |
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PPC
PPC
PPC - Pretoria Portland Cement Company Limited - Unaudited Interim Results For
The Half-Year Ended 31 March 2009
Pretoria Portland Cement Company Limited
(Incorporated in the Republic of South Africa)
(Company registration number: 1892/000667/06)
JSE Code: PPC
ISIN: ZAE000125886
("PPC" or "the company")
Unaudited Interim Results For The Half-Year Ended 31 March 2009
PPC delivers solid interim performance
in challenging economic environment
Highlight of Interim Financial results 2009:
- STRONG CASH GENERATION OF R1.03 BILLION
- REVENUES UP 12% TO R3.3 BILLION
- NEW DWAALBOOM KILN CONTRIBUTING TO IMPROVED EFFICIENCIES
- REDUCING INPUT COSTS POSITIVE FOR 2ND HALF
Despite challenging economic conditions Pretoria Portland Cement Limited (PPC)
delivered a robust performance. The company today released their interim
results for the half year ended 31 March 2009.
Commenting on the results John Gomersall, chief executive officer of PPC said:
"PPC has again managed to produce a solid set of results with strong operating
cash flows, despite our economy experiencing the effects of the global
crisis.``
Group revenue increased by 12% to R3.3billion (2008: R2.9 billion) whilst
operating profit before the IFRS 2 charge for the BBBEE transaction rose 2% to
R1 100 million (2008: R1 077 million).
Cash generated from operations remained strong at R1 026 million (2008: R1 106
million) and earnings per share, excluding BBBEE IFRS 2 charges declined by 16
% to 105.8 cents (2008: 125.8 cents).
In view of the continued strong cash generation, the directors have declared
an unchanged interim dividend of 45 cents per share (2008: 45 cents per
share). The company expects to maintain dividend cover for the full year in
the stated range of 1,2 to 1,5 times based on earnings before the IFRS 2
charge resulting from the BBBEE transaction.
While industry regional cement demand declined by 7.5% for the period under
review, rural demand showed positive growth, reflecting both the increased
level of social grants and consumers` increased access to building supplies in
these areas. Demand in the construction sector increased by 12%, indicating
that infrastructure project offtake continues to grow, helping to partially
offset the slow-down in the residential sector.
PPC`s total regional sales volumes ended only 6% below last year benefiting
from growing demand from major projects and the continued growth in rural
demand and in the Botswana market that helped offset the lower demand in
coastal markets.
PPC`s inland market share increased in most bag markets and through several
major infrastructural projects that are now consuming cement and this helped
offset the decline in the coastal markets.
The group EBITDA grew by 5% to R1 245 million (2008: R1 182 million). The
group EBITDA percentage margin decreased compared to the same period last
year, reflecting the lower lime and cement volumes and continued cost
increases. The cement EBITDA margin dropped 1.7 percentage points as the
consistently high input cost increases experienced since last year were only
partially recovered by the January selling price increase in the second
quarter. The cost recovery effect thereof will be more significant in the
second half.
The new Dwaalboom plant contributed to efficiencies in production and together
with improved distribution costs and declining input costs, the second half
should see a recovery in EBITDA margins for the Group for the full year
results expected to be announced in November.
Gomersall added: "In view of expected cost reductions and the current economic
situation, it is possible that our normal mid-year selling price increase may
be deferred. We anticipate regaining the EBITDA margin eroded since the
beginning of 2008 during the next six month reporting period and well into
2010."
The company`s outlook statement said that the government`s commitment to
infrastructural development indicated that growth in Gross Fixed Capital
Formation was likely to continue well beyond 2010. Additionally, further
reductions in SA interest rates are likely to generate some resumption of
activity in the residential and other interest rate sensitive sectors later
this year and into 2010. In the meantime, rural demand should continue to
under-pin bagged cement demand.
Gomersall concluded: "Although there are some positive signs, the company
believes industry regional cement demand for this financial year may reflect a
decline of up to 10% on last year`s volumes. We remain confident that, given
the economic circumstances, a solid performance reflecting strong operating
cash flows will be reported for the full year.
A webcast of PPC`s interim results presentation will be available at
www.ppc.co.za from 11h00 12 May 2008
For further media enquiries please contact;
PPC
John Gomersall, CEO Tel: 011 386 9000/9059
Kevin Odendaal, IR
College Hill
Jacques de Bie Tel: 011 447 3030
Nandile Ngubentombi
12 May 2009
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 12/05/2009 07:20:01 Produced by the JSE SENS Department.
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