PPC - Trading Statement and cautionary announcemen
PPC - Trading Statement and cautionary announcement in terms of Paragraph 3.4
(b) of Listing Requirements
Pretoria Portland Cement Company Limited
("PPC" or "the company")
(Registration number 1892/000667/06)
JSE code: PPC ISIN code: ZAE 000005559
Trading Statement in terms of Paragraph 3.4 (b) of Listing Requirements
In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Securities
Exchange South Africa, PPC is required to issue a statement should its financial
results be expected to be materially different from those of the prior
comparable period.
In the interim results announcement for the period ended 31 March 2003, released
on 14 May 2003, the company commented that it "is expecting to report increased
operating profits and cash flows for the full year" and that "the year on year
increase in the second half is however likely to be lower than that achieved in
the first half".
Domestic cement demand has been buoyant and accordingly year on year growth in
sales volumes has been stronger than anticipated.
Accordingly, PPC advises that its headline earnings and earnings before
exceptional items for the year to end September 2003 are expected to be
substantially above those for the previous year.
At the same time, PPC draws attention to the fact that subsidiary company
Portland Holdings Limited Zimbabwe ("Porthold") operates in a hyperinflationary
economy and accordingly PPC applies IAS 29 (Financial Reporting in
Hyperinflationary Economies). Comparative results will therefore be restated
and translated to Rands at the rate of exchange ruling on 30 September 2003.
The effect of the restatement will be to increase:
Net profit attributable to PPC shareholders for 2002 by R4,7 million from R600,3
million to R605,0 million.
Headline earnings per share for 2002 by 8,8 cents from 829,5 to 838,3.
Commenting on the restatement, Group Financial Director, Peter Nelson said "that
it was a normal requirement of IAS 29 and that it arose because the losses
reported by Porthold were being adjusted in line with current inflation and
exchange rates to provide a meaningful comparative result. The fact that the
Zimbabwe dollar had depreciated more than inflation, effectively reduces the
comparative period loss for Porthold, thereby increasing the comparative period
net income of PPC."
Cautionary announcement
The contents of the trading statement have not been reviewed by a reporting
accountant. Shareholders are therefore advised to exercise caution when trading
in their PPC shares, until the financial results for the year ended 30 September
2003 are released on 7 November 2003.
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