PPC LIMITED - Operational update, restructuring and refinancing project update and renewal of cautionary announcement

Operational update, restructuring and refinancing project update and renewal of cautionary announcement

PPC Ltd
(Incorporated in the Republic of South Africa)
(Company registration number 1892/000667/06)
JSE ISIN: ZAE000170049
JSE code: PPC ZSE code: PPC
(“PPC” or “Company”)



OPERATIONAL UPDATE, RESTRUCTURING AND REFINANCING PROJECT UPDATE AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT



OPERATIONAL UPDATE – NOVEMBER 2020
As previously reported to shareholders of the Company (“Shareholders”) in the
announcement released on the Stock Exchange News Services on 9 October 2020, PPC
experienced muted sales in April and May 2020 due to the COVID-19 restrictions
imposed across most of the jurisdictions in which the group operates. A strong
recovery was experienced in PPC South Africa & Botswana from June, with double-
digit year-on-year growth in cement sales volumes since June. In the three months
July to September, cement sales volumes increased by 20% to 25% year-on-year and.


This trend has continued in October 2020 with strong cement sales volumes experienced 
for the month, up 15% to 20% compared to the same period last year. These increased 
volumes are primarily retail led, as increases in disposable income due to reduced 
discretionary spending on other items due to reduced movement and an increase in income 
due to reduced interest rates and the various social relief grants continued. 
PPC has also started to experience the positive impact of increased infrastructure spending,
which it hopes will carry the strong demand once retail sales volumes return to more normalised levels.


The International operations were less affected by the COVID-19 pandemic. In
aggregate, total cement volumes sold also showed double-digit growth in June 2020
to September 2020 compared to the same period in 2019. For the first 6 months of
FY21, PPC Zimbabwe, and PPC Barnet (DRC) experienced approximately 5% to 10% volume
growth each compared to the prior comparable period. In the period July to
September 2020, sales volumes in PPC Zimbabwe and PPC Barnet increased by 35% to
40% and 20% to 25% respectively, compared to the same period in 2019. October
2020    has   seen    more    moderate   growth    in   cement   volumes    for
PPC   Zimbabwe   at approximately 5% compared to October 2019, whilst PPC Barnet has 
continued to experience strong growth, with cement volumes up 25% to 30% compared to 
October 2019. In Rwanda, CIMERWA experienced approximately 5% to 10% volume growth from
April 2020 to September 2020 compared to the same period last year, and in the
months July to September 2020 sales volumes increased by 15% to 20% year-on-year.
October 2020 cement volumes have continued to show good growth, of 25% to 30%
compared to October 2019. As highlighted in the year-end results announcement, despite the 
continued positive sales momentum, the group remains cautious on the outlook for the rest of FY21
given the ongoing health crisis and its resultant impact on economic activity.
PPC’s initiatives remain focused on   cash preservation, improving cost competitiveness by
lowering operational costs, positioning the   business    for recovery and improving internal controls 
and accountability.


RESTRUCTURING AND REFINANCING UPDATE
As previously communicated to Shareholders and set out in detail in the annual
consolidated financial  statements for the year ended 31 March 2020, PPC is
undertaking a restructuring and refinancing project (“Project”) with the objective
of implementing a sustainable capital structure and improving the investment
prospects of the group. PPC continues to make positive progress on the Project
with finalisation of revised facilities documentation with its South African
lenders expected this month and  restructuring negotiations progressing
constructively with its DRC lenders on the basis of the term sheet and de facto
standstill agreed in September 2020. PPC is on track to test investor appetite
regarding recapitalising the International operations before the end of this
calendar year.

PPC will provide a more comprehensive update to Shareholders when it reports its
interim results, which is expected to be in early December 2020.

RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue exercising caution when dealing in securities
of PPC until the funding arrangements with its respective lenders are finalised
and details of the proposed capital raise are published.


Sandton
11 November 2020



Sponsor
Merrill Lynch South Africa (Pty) Limited

Financial Communications Advisor:
Instinctif Partners
Louise Fortuin
Mobile: +27 71 605 4294

Date: 11-11-2020 04:50:00
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