PPC forecasts earnings drop

PPC ZIMBABWE’S parent company PPC anticipates its earnings for the year to March 2020 to decline by more than 20 percent due to impairments on property, plant and equipment and other fair value adjustments.
In the prior comparable period last year, PPC reported basic earnings per share and headline earnings per share of 16 cents per share and 20 cents per share, respectively.
“The general economic environment and the Covid-19 pandemic will have a material impact on these adjustments, which are being finalised. PPC will provide further guidance once reasonable certainty has been established on the range, in compliance with the JSE Listings Requirements,” Anashrin Pillay, PPC’s head of investor relations said in a recent trading update.
PPC said it expects to publish the group’s financial results for the year to March 31, 2020 on or before August 31, 2020.

Pillay said operations ramped up in May post the lifting of the Covid-19 restrictions imposed at the end of March 2020 across most of the jurisdictions in which the group operates.
“As reported on April 30, 2020, sales volumes were significantly impacted in April 2020. In May 2020, South Africa cement sales volumes were still around 30- 35 percent below May 2019 as the operations gradually resumed,” he said.
PPC International said May cement sales volumes were less than five percent below the same period in 2019, mainly driven by strong sales volumes in Rwanda.
“The demand recovery has been strong in June 2020, as the cement sales volumes in South Africa grew by double digits compared to June 2019. This recovery is mostly driven by the absence of imports that has given an opportunity for local producers like PPC South Africa to grow,” he said.
Pillay said it is crucial that substandard cement and imports are properly addressed for the sustainability of the local cement industry.
Cement sales volumes in PPC International also show a year-on-year growth in the month of June 2020.
PPC said on the back of the improved sales volumes and the various cost and cash preservation measures, the cash flows for the last two months have shown a positive trajectory.
“PPC continues to have the support of its lenders to navigate the impact of the health and economic crisis. The discussions with the lenders around the announced capital restructuring continue in a constructive climate.
“More information on this important project will be shared at the announcement of the FY20 annual results. The information in this trading statement has not been reviewed or reported on by the company’s external auditors,” said