| Wed 28 Oct 2009, 7:05 | | PPC - Pretoria Portland Cement Company Limited - Trading Statement and |
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PPC
PPC
PPC - Pretoria Portland Cement Company Limited - Trading Statement and
Consolidation of Portland Holdings Limited
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")
Trading Statement and Consolidation of Portland Holdings Limited
In terms of the Listing Requirements of the JSE Limited, companies are required
to publish a Trading Statement as soon as they become reasonably certain that
the financial results for the period to be reported on next will differ by more
than 20% from those of the previous corresponding period.
The board of directors of PPC advises that its earnings per share and headline
earnings per share for the year ended 30 September 2009 are expected to be
between 20% - 30% less, and 35% - 45% less respectively compared with the year
ended 30 September 2008.
Shareholders are reminded that the primary reason for this decrease is the
International Financial Reporting Standards (IFRS) 2 charge which is a
consequence of the BBBEE transaction and which was anticipated in the SENS
announcement on 28 August 2008 and outlined in the circular to shareholders on
16 October 2008. This was also the reason for the Trading Statement released on
SENS on 12 May 2009 regarding PPC`s interim results for the six months ended 31
March 2009.
Furthermore, PPC`s interim results published on SENS on 12 May 2009, included a
statement indicating that the results of its wholly owned Zimbabwean subsidiary,
Portland Holdings Limited ("Porthold"), were not consolidated as at 31 March
2009 as there remained significant constraints impacting on the normal
operations of Porthold and the PPC board had concluded that management did not
have the ability to exercise effective control over the business at the time.
Zimbabwe`s move to a US dollar and Rand based economy has restored key relevant
fundamentals to the economy. This has removed many of the distortions that
existed in the Zimbabwean economy, which included unrealistic local market
cement price determination, not receiving the full benefit of export proceeds,
exchange rate uncertainty and foreign currency restrictions, shortages of
manufacturing inputs and the effects of extreme hyperinflation.
Due to changes in the above Zimbabwean macroeconomic conditions the directors of
PPC are of the opinion that the requirements for effective control over
Porthold, in terms of the definition and requirements of the International
Accounting Standards (IAS) 27 (Consolidated and Separate Financial Statements),
have been met, and accordingly Porthold was consolidated from 30 September 2009
(the "effective date").
The carrying value of the investment in Porthold at the effective date was R260
million. In terms of IFRS 3 (revised 2008), Business Combinations, the effective
date fair value of Porthold was determined at R473 million, and the appropriate
balance sheet values of Porthold will be included in the PPC consolidated
balance sheet from the effective date. The resultant take-on gain of R213
million will be recognised in the income statement and will be included in net
profit, but excluded from headline earnings.
Earnings per share and headline earnings per share excluding both the IFRS 2
charge relating to the BBBEE transaction and the gain on consolidation of
Porthold, do not differ by more than 20% from those reported for the previous
corresponding period.
The information contained in this trading statement has not been reviewed or
reported on by the company`s external auditors. PPC will release its annual
results for the period ended 30 September 2009 on or around 11 November 2009.
28 October 2009
Sponsor
Merrill Lynch South Africa (Pty) Limited
Notes to Editors
Porthold is a wholly owned subsidiary of PPC which operates cement clinker and
cement milling plants in Colleen Bawn and Bulawayo respectively.
Porthold is Zimbabwe`s major cement producer with a capacity of approximately
760,000 tons of cement per year. Both plants contain some of the most modern
cement manufacturing technology in southern Africa. Porthold produces the well-
known "Unicem" brand which is a versatile multi-purpose cement.
Both plants are fully staffed and utilisation levels have improved significantly
from below 10% in the first part of the calendar year to currently between 35%
and 45%. Local cement selling prices are now in line with regional cement
prices.
Date: 28/10/2009 07:05:02 Produced by the JSE SENS Department.
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