PPC is a leading manufacturer and supplier of cement, aggregates, ready-mix, lime, limestone, and fly-ash in Africa. The company operates eleven cement factories located in South Africa, Botswana, the DRC, Zimbabwe, Rwanda, and Ethiopia, with a combined production capacity of 11.5 million tons. It produces aggregates at its Mooiplaas quarry in Gauteng, the largest aggregates producer in South Africa, and operates 26 batching plants for ready-mix concrete in South Africa and Mozambique.
The company successfully re-negotiated its lending arrangements, avoiding the need for a highly dilutive rights issue. No dividends have been paid in the last five years. PPC faces challenges from the carbon tax implemented on 1st June 2019, costing the company between R100 million and R120 million annually. PPC intends to pass this cost on to consumers, which could reduce its competitiveness against foreign imports unless tariffs are increased. The company's growth strategy focuses heavily on expansion into other African markets.
PPC, like much of the construction industry, has struggled due to a lack of new government and quasi-government projects in South Africa. To compensate, the company has been cutting costs and investing in other African markets. However, the cement industry remains oversupplied, presenting ongoing management challenges. PPC has also benefited from the South African government's "localisation" policy, which requires government operations to purchase locally produced cement.
In its results for the six months to 30th September 2024, PPC reported revenue down by 4.2% and headline earnings per share (HEPS) of 22 cents, compared with 20 cents in the previous period. The company stated, "Cost discipline and price growth were the main drivers of the recovery in the results and margin of the SA & Botswana group despite the lower sales volumes in the period."
PPC is currently building a state-of-the-art plant in the Western Cape in partnership with Sinoma, the world's largest cement equipment producer, at a cost of R3 billion. The company has been in an upward share price trend since October 2022, which is expected to continue. PPC has conducted a R200 million share buy-back and reduced its debt by 20%. On 28th August 2024, the company announced a special dividend of 33.5 cents per share following the sale of its 51% stake in Cimerwa in Rwanda.
Looking ahead, PPC is well-positioned to benefit from South Africa's new government of national unity (GNU) and the anticipated reduction in interest rates. However, the company's performance will remain closely tied to broader economic and infrastructure trends across its operating regions.
The company successfully re-negotiated its lending arrangements, avoiding the need for a highly dilutive rights issue. No dividends have been paid in the last five years. PPC faces challenges from the carbon tax implemented on 1st June 2019, costing the company between R100 million and R120 million annually. PPC intends to pass this cost on to consumers, which could reduce its competitiveness against foreign imports unless tariffs are increased. The company's growth strategy focuses heavily on expansion into other African markets.
PPC, like much of the construction industry, has struggled due to a lack of new government and quasi-government projects in South Africa. To compensate, the company has been cutting costs and investing in other African markets. However, the cement industry remains oversupplied, presenting ongoing management challenges. PPC has also benefited from the South African government's "localisation" policy, which requires government operations to purchase locally produced cement.
In its results for the six months to 30th September 2024, PPC reported revenue down by 4.2% and headline earnings per share (HEPS) of 22 cents, compared with 20 cents in the previous period. The company stated, "Cost discipline and price growth were the main drivers of the recovery in the results and margin of the SA & Botswana group despite the lower sales volumes in the period."
PPC is currently building a state-of-the-art plant in the Western Cape in partnership with Sinoma, the world's largest cement equipment producer, at a cost of R3 billion. The company has been in an upward share price trend since October 2022, which is expected to continue. PPC has conducted a R200 million share buy-back and reduced its debt by 20%. On 28th August 2024, the company announced a special dividend of 33.5 cents per share following the sale of its 51% stake in Cimerwa in Rwanda.
Looking ahead, PPC is well-positioned to benefit from South Africa's new government of national unity (GNU) and the anticipated reduction in interest rates. However, the company's performance will remain closely tied to broader economic and infrastructure trends across its operating regions.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.