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PRETORIA PORTLAND CEMENT COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
COMPANY REGISTRATION NUMBER 1892/000667/06
AUDITED PRELIMINARY REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2000
HIGHLIGHTS
* 29% GROWTH IN OPERATING PROFIT
* 32% GROWTH IN EARNINGS PER SHARE
* 22% INCREASE IN FINAL 2000 DIVIDEND
INTERNATIONAL ACCOUNTING STANDARDS
THE COMPANY ADOPTED INTERNATIONAL ACCOUNTING STANDARDS (IAS) DURING THE CURRENT
FINANCIAL YEAR. EARNINGS PER SHARE FOR THE YEAR (AFTER EXCEPTIONAL ITEMS) WOULD
HAVE INCREASED BY 40% TO 521,8 CENTS (1999: 373,1 CENTS) HAD IAS NOT BEEN
ADOPTED.
COMMENT
THE COMPANY HAS EMBRACED THE PRINCIPLES OF VALUE BASED MANAGEMENT (VBM), THE
FOCUS OF WHICH IS TO CREATE VALUE THROUGH THE DELIVERY OF SUPERIOR CASH FLOW
RETURNS ON INVESTMENTS, CUSTOMER SATISFACTION, AND THE EMPOWERMENT AND
MOTIVATION OF EMPLOYEES.
THE PLEASING RESULTS FOR THE YEAR ARE LARGELY ATTRIBUTABLE TO THE GLOBAL
COMPETITIVENESS DRIVE AND THE EARLY BENEFITS OF VBM. PPC SALDANHA WAS
OPERATIONAL FOR THE FULL YEAR CONTRIBUTING TO PROFITABILITY FOR THE FIRST TIME.
EARNINGS PER SHARE AFTER EXCEPTIONAL ITEMS INCREASED BY 32% TO 518,6 CENTS PER
SHARE.
OPERATING PROFIT INCREASED BY 29% TO R312,3 MILLION ON A TURNOVER INCREASE OF
2%. THE IMPROVEMENT IN THE OPERATING PROFIT OF CEMENT (40%) AND LIME (32%) MORE
THAN OFFSET THE DECLINE IN PACKAGING AND LOGISTICS. THE FOCUS ON GLOBAL
COMPETITIVENESS AND THE REDUCTION OF THE COST STRUCTURE IS REFLECTED IN THE
SIGNIFICANT IMPROVEMENT IN OPERATING MARGIN FROM 14,2% TO 18,4%.
FINANCE COSTS DECLINED BY 20% TO R44,4 MILLION REFLECTING THE BENEFIT OF STRONG
CASH FLOWS AND THE RESULTANT LOWER LEVELS OF BORROWINGS.
TAXATION CHARGES INCLUDE R20,5 MILLION IN RESPECT OF PRIOR YEAR CREDITS AS A
RESULT OF TAX ASSESSMENTS RECEIVED. THE TAX CHARGE IN THE 1999 RESULTS INCLUDED
A R30,3 MILLION DEFERRED TAX CREDIT FOLLOWING THE REDUCTION IN THE COMPANY TAX
RATE FROM 35% TO 30%.
CEMENT
DOMESTIC CEMENT DEMAND DECLINED 0,2% WITH GROWTH IN GAUTENG AND WESTERN
PROVINCE BEING OFFSET BY A DECLINE IN DEMAND IN EVERY OTHER PROVINCE. LOW
LEVELS OF GROSS FIXED CAPITAL FORMATION (GFCF), COMPARATIVELY HIGH REAL RATES
OF INTEREST AND THE IMPACT OF THE WIDE SPREAD FLOODS, DELAYED THE ANTICIPATED
RECOVERY IN THE MARKET. AT THE SAME TIME, THE EXPORT MARKET FOR CLINKER WAS
INCREASINGLY COMPETITIVE.
OUR DOMESTIC SALES VOLUMES DECLINED BY 2,6% COMPARED TO LAST YEAR FOLLOWING
STRATEGIES TO IMPROVE THE QUALITY OF OUR CUSTOMER BASE, EXIT LESS PROFITABLE
MARKETS AND IN THE PROCESS IMPROVE MARGINS GENERALLY.
PRIOR YEAR RESTRUCTURING, VBM INITIATIVES AND FURTHER PROGRESS ON THE GLOBAL
COMPETITIVENESS PROGRAMME, REDUCED BOTH OPERATING COSTS AND WORKING CAPITAL
REQUIREMENTS. LOWER FINANCING CHARGES AND REDUCED LEVELS OF DOUBTFUL DEBTS
ADDED TO PROFITABILITY. THE READYMIX AND KGALE QUARRY (50% INTEREST) BUSINESSES
IN GABARONE, ACQUIRED DURING THE YEAR FOR R19,7 MILLION ACHIEVED EXPECTED
RETURNS, WHICH EXCEED THE COST OF CAPITAL. THE PIENAARS RIVER AND LOERIE
QUARRIES WERE CLOSED DURING THE YEAR AND THE NEW GRASSRIDGE QUARRY WAS
COMMISSIONED IN THE EASTERN CAPE WHICH HAS REDUCED THE COST OF PRODUCTION AT
THE PE FACTORY.
CEMENT OPERATING PROFIT INCLUDING ASSOCIATE COMPANIES INCREASED BY 40% TO
R279,1 MILLION AND THE OPERATING MARGIN IMPROVED TO 20,3% (1999: 14,9%).
LIME
LIME VOLUMES IMPROVED BY 4% MAINLY AS A RESULT OF THE IMPROVED OUTPUT BY
SALDANHA STEEL. DEMAND FROM THE GOLD AND THE REMAINDER OF THE STEEL INDUSTRIES
DECLINED SLIGHTLY.
PPC SALDANHA OPERATED AT APPROXIMATELY 70% OF DESIGN CAPACITY IN LINE WITH THE
IMPROVED LEVEL OF OUTPUT BY SALDANHA STEEL AND CONTRIBUTING TO THE
PROFITABILITY OF LIME FOR THE FIRST TIME.
CONTINUED FOCUS ON ENERGY COSTS, ALTERNATIVE ENERGY SOURCES AND A NORMALISING
OF OPERATING COSTS AFTER HIGH RAINFALL DURING THE FIRST HALF OF THE YEAR,
RESULTED IN A SIGNIFICANT IMPROVEMENT DURING THE SECOND HALF.
LIME OPERATING PROFIT INCREASED BY 32% TO R43,0 MILLION AND THE OPERATING
MARGIN IMPROVED TO 13,4% (1999: 11,1%).
LOGISTICS AND PACKAGING
LOGISTICS WAS NEGATIVELY IMPACTED BY LOWER CEMENT VOLUMES, FUEL PRICE INCREASES
AND MAINTENANCE COSTS ASSOCIATED WITH THE DETERIORATING ROAD INFRASTRUCTURE.
PACKAGING VOLUMES DECLINED AS A RESULT OF THE LOWER DEMAND FOR CEMENT BAGS AND
THE INCREASED COMPETITION IN THE DOMESTIC AND EXPORT PACKAGING MARKETS.
BOTH LOGISTICS AND PACKAGING INCURRED RATIONALISATION COSTS DURING THE YEAR AS
A RESULT OF WHICH MARGINS AND PROFITABILITY ARE EXPECTED TO IMPROVE IN THE
COMING YEAR.
ASSOCIATE COMPANIES
THE SHARE OF ASSOCIATE COMPANIES' PROFITS IMPROVED AS A RESULT OF A STRONGER
PERFORMANCE FROM NATAL PORTLAND CEMENT CO. (PTY) LIMITED AND REDUCED LOSSES AT
SLAGMENT (PTY) LIMITED.
PROSPECTS
THE CURRENT YEAR'S RESULTS REFLECT THE BENEFITS FROM INVESTMENTS AND IMPROVED
OPERATING EFFICIENCIES. FURTHER IMPROVEMENTS ARE TARGETED IN ALL OUR BUSINESSES
IN THE YEAR AHEAD. ENHANCED MOTIVATION, AND THE DEVELOPMENT AND EMPOWERMENT OF
OUR PEOPLE ARE EXPECTED TO CREATE FURTHER SHAREHOLDER VALUE.
CONCERNS REGARDING HIGH REAL RATES OF INTEREST MAY LIMIT VOLUME GROWTH. IT IS
ANTICIPATED HOWEVER THAT THE BACKLOG IN DOMESTIC AND REGIONAL FIXED INVESTMENT
WILL RECEIVE ATTENTION AND THAT MODEST GROWTH IN VOLUMES WILL MATERIALISE IN
2001.
THE COMPANY IS THEREFORE EXPECTING TO REPORT HIGHER EARNINGS AND CASH FLOWS AND
IS WELL POISED TO BENEFIT FROM ANY IMPROVEMENT IN MARKET CONDITIONS
ON BEHALF OF THE BOARD
W A M CLEWLOW J E GOMERSALL
CHAIRMAN CHIEF EXECUTIVE OFFICER
8 NOVEMBER 2000
CONSOLIDATED INCOME STATEMENT
YEAR ENDED
30 SEPT 30 SEPT.
2000 1999
AUDITED AUDITED
RESTATED %
RM RM CHANGE
REVENUE 1 778,4 1 741,0 2
OPERATING PROFIT 312,3 242,1 29
FINANCE COSTS 44,4) (55,7) 20
INVESTMENT INCOME 41,7 30,7 36
PROFIT BEFORE EXCEPTIONAL ITEMS 309,6 217,1 43
EXCEPTIONAL ITEMS 9,9 (12,9)
PROFIT BEFORE TAXATION 319,5 204,2 56
TAXATION 71,3 13,6
NET PROFIT AFTER TAXATION 248,2 190,6 30
INCOME FROM ASSOCIATE COMPANIES 11,1 3,7
NET PROFIT ATTRIBUTABLE TO
SHAREHOLDERS 259,3 194,3 33
NET PROFIT ATTRIBUTABLE TO
SHAREHOLDERS 259,3 194,3 33
EXCEPTIONAL ITEMS AFTER TAXATION (9,2) 9,3
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS
BEFORE EXCEPTIONAL ITEMS 250,1 203,6 23
EARNINGS PER SHARE BEFORE
EXCEPTIONAL ITEMS (CENTS)
- BASIC 500,2 411,4 22
- FULLY DILUTED 500,1 411,3 22
EARNINGS PER SHARE AFTER EXCEPTIONAL
ITEMS (CENTS)
- BASIC 518,6 392,5 32
- FULLY DILUTED 518,5 392,5 32
ORDINARY SHARES OF R1 EACH FULLY
PAID IN ISSUE (000) 50 006 49 982
WEIGHTED AVERAGE NUMBER OF SHARES
IN ISSUE DURING THE YEAR (000) 49 998 49 496
DIVIDENDS PER SHARE (CENTS)
- FINAL 225 185 22
- INTERIM 90 85
315 270 17
CONSOLIDATED BALANCE SHEET
30 SEPT. 30 SEPT
2000 1999
AUDITED AUDITED
RESTATED
RM RM
ASSETS
NON-CURRENT ASSETS 1 896,6 1 842,9
PROPERTY, PLANT AND EQUIPMENT,
INVESTMENTS AND LOANS 1 880,4 1 827,9
OTHER NON-CURRENT ASSETS 16,2 15,0
CURRENT ASSETS 652,0 542,4
INVENTORIES AND RECEIVABLES 503,4 468,9
CASH AND CASH EQUIVALENTS 148,6 73,5
TOTAL ASSETS 2 548,6 2 385,3
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
SHARE CAPITAL AND PREMIUM 614,8 613,9
NON-DISTRIBUTABLE RESERVES AND
RETAINED PROFIT 1 106,9 982,7
SHAREHOLDERS' INTEREST 1 721,7 1 596,6
NON-CURRENT LIABILITIES 556,2 528,0
LONG-TERM BORROWINGS 277,4 267,2
OTHER NON-CURRENT LIABILITIES 42,6 50,9
DEFERRED TAX LIABILITIES 236,2 209,9
CURRENT LIABILITIES 270,7 260,7
SHORT-TERM BORROWINGS 18,7 25,0
ACCOUNTS PAYABLE 252,0 235,7
TOTAL EQUITY AND LIABILITIES 2 548,6 2 385,3
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED
30 SEPT. 30 SEPT
2000 1999
AUDITED AUDITED
RESTATED
RM RM
SHAREHOLDERS' INTEREST AT
BEGINNING OF YEAR 1 596,6 1 440,6
INCREASE IN SHARE CAPITAL AND PREMIUM 0,9 108,1
OTHER MOVEMENTS 2,4 4,3
NET MOVEMENTS NOT RECOGNISED
THROUGH THE INCOME STATEMENT 3,3 112,4
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 259,3 194,3
DIVIDENDS AND CAPITALISATION AWARDS (137,5) (150,7)
NET MOVEMENTS RECOGNISED
THROUGH THE INCOME STATEMENT 121,8 43,6
SHAREHOLDERS' INTEREST AT END
OF YEAR 1 721,7 1 596,6
SEGMENTAL ANALYSIS OF THE GROUP
YEAR ENDED
30 SEPT. 30 SEPT.
2000 1999
AUDITED AUDITED %
RESTATED CHANGE
REVENUE
RM
CEMENT 1 372,7 1 332,7 3
LIME 322,0 293,3 10
LOGISTICS AND PACKAGING 255,3 279,9 (9)
1 950,0 1 905,9 2
LESS:INTER-GROUP SALES* 171,6 164,9 4
1 778,4 1 741,0 2
* PRIMARILY LOGISTICS AND PACKAGING
OPERATING PROFIT INCLUDING INCOME
FROM ASSOCIATE COMPANIES
RM
CEMENT 279,1 198,8 40
LIME 43,0 32,6 32
LOGISTICS AND PACKAGING 5,0 16,6 (70)
327,1 248,0 32
OPERATING PROFIT INCLUDING INCOME
FROM ASSOCIATE COMPANIES IS
ARRIVED AT AS FOLLOWS:
RM
OPERATING PROFIT 312,3 242,1
DIVIDENDS FROM ASSOCIATE COMPANIES 3,7 2,2
SHARE OF ASSOCIATE COMPANIES'
RETAINED PROFIT 11,1 3,7
327,1 248,0
OPERATING MARGIN %
CEMENT 20,3 14,9
LIME 13,4 11,1
LOGISTICS AND PACKAGING 2,0 5,9
18,4* 14,2*
* BASED ON REVENUE NET OF INTER-GROUP SALES
NET OPERATING ASSETS
RM
CEMENT 1 221,3 1 200,2 2
LIME 381,2 354,5 8
LOGISTICS AND PACKAGING 148,7 172,6 (14)
1 751,2 1 727,3 1
CONSOLIDATED
CASH FLOW STATEMENT
YEAR ENDED
30 SEPT. 30 SEPT.
2000 1999
AUDITED AUDITED
RESTATED
RM RM
PROFIT BEFORE EXCEPTIONAL ITEMS 309,6 217,1
ADD DEPRECIATION AND OTHER 155,0 137,9
NET DECREASE IN WORKING CAPITAL 7,5 25,2
TAXATION PAID (72,9) (7,7)
DIVIDENDS PAID (137,5) (42,6)
NET CASH INFLOW FROM OPERATING ACTIVITIES 261,7 329,9
REPLACEMENT CAPITAL EXPENDITURE (136,0) (136,9)
INVESTMENT IN FUTURE OPERATIONS (25,9) (92,1)
ACQUISITION OF INVESTMENTS (57,3) (82,2)
PROCEEDS ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT 15,9 7,4
OTHER CASH FLOWS 11,9 10,2
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (191,4) (293,6)
NET CASH INFLOW FROM FINANCING ACTIVITIES 4,8 12,2
NET CASH GENERATED 75,1 48,5
NOTES
YEAR ENDED
30 SEPT. 30 SEPT.
2000 1999
AUDITED AUDITED
RESTATED
RM RM
1. CHANGES IN ACCOUNTING POLICY
THE GROUP ADOPTED INTERNATIONAL ACCOUNTING STANDARDS FOR THE FIRST TIME DURING
THE CURRENT FINANCIAL YEAR. THE FINANCIAL STATEMENTS HAVE BEEN PREPARED AND
PRESENTED AS IF THEY HAD ALWAYS BEEN PREPARED IN ACCORDANCE WITH THE STANDARDS
AND INTERPRETATIONS EFFECTIVE FOR THE PERIOD OF FIRST TIME APPLICATION.
THE EFFECT OF THE CHANGES IN ACCOUNTING POLICY RESULTED IN AN INCREASE IN THE
1999 NET PROFIT FOR THE YEAR OF R9,6 MILLION (19,4 CENTS PER SHARE).
2. PROFIT BEFORE TAXATION
INCLUDED IN PROFIT BEFORE TAXATION IS:
DEPRECIATION 151,2 132,9
COST OF SALES 1 213,8 1 306,5
3. NET PROFIT BEFORE EXCEPTIONAL ITEMS
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 259,3 194,3
IMPAIRMENT (REVERSAL)/LOSSES (0,7) 13,4
PURCHASE CONSIDERATION OF SUBSIDIARY
RECOVERED (7,2) -
PROFIT ON DISPOSAL OF PROPERTIES (2,0) (0,4)
OTHER - (0,1)
TAXATION 0,7 (3,6)
NET PROFIT BEFORE EXCEPTIONAL ITEMS 250,1 203,6
4. INVESTMENTS
UNLISTED AT COST 254,6 209,8
UNLISTED ASSOCIATE COMPANIES AT
CARRYING VALUE INCLUDING LOANS 62,5 47,9
DIRECTORS' VALUATION OF INVESTMENTS
- UNLISTED 261,4 214,1
- UNLISTED ASSOCIATE COMPANIES 168,1 89,6
5. BORROWINGS
THE COMPANY'S BORROWING POWERS ARE NOT RESTRICTED
BORROWINGS 296,1 292,2
6. COMMITMENTS
CAPITAL COMMITMENTS 30,5 101,4
CONTRACTED 12,6 64,1
APPROVED 17,9 37,3
LEASE COMMITMENTS 7,5 9,7
38,0 111,1
7. CONTINGENT LIABILITIES
THERE ARE CONTINGENT LIABILITIES IN RESPECT OF GUARANTEES COVERING LOANS,
BANKING FACILITIES AND OTHER OBLIGATIONS OF SUBSIDIARIES AND OTHER THIRD
PARTIES LIMITED TO R5,1 MILLION (1999: R5,1 MILLION).
DECLARATION OF DIVIDEND NO. 187
FINAL DIVIDEND NO. 187 OF 225 CENTS PER SHARE HAS BEEN DECLARED PAYABLE TO
SHAREHOLDERS REGISTERED IN THE SHARE REGISTER OF THE COMPANY AT THE CLOSE OF
BUSINESS ON 1 DECEMBER 2000.
THE TRANSFER BOOKS AND THE REGISTER OF MEMBERS OF THE COMPANY WILL BE CLOSED
FROM 2 DECEMBER 2000 TO 10 DECEMBER 2000, BOTH DAYS INCLUSIVE, FOR THE PURPOSE
OF DETERMINING THOSE SHAREHOLDERS TO WHOM A DIVIDEND WILL BE PAID.
DIVIDEND WARRANTS WILL BE POSTED ON OR ABOUT 11 JANUARY 2001 TO SHAREHOLDERS AT
THEIR REGISTERED ADDRESSES OR IN ACCORDANCE WITH THEIR WRITTEN INSTRUCTIONS
RECEIVED UP TO AND INCLUDING 1 DECEMBER 2000. THE DIVIDEND IS DECLARED AND
PAYABLE IN THE CURRENCY OF THE REPUBLIC OF SOUTH AFRICA.
BY ORDER OF THE BOARD
BARLOWS TRUST COMPANY LIMITED
SECRETARIES 8 NOVEMBER 2000
DIRECTORS:
WAM CLEWLOW (CHAIRMAN), J E GOMERSALL* (CHIEF EXECUTIVE OFFICER), D C ARNOLD, P
J BLACKBEARD, R J BURN, R K J CHAMBERS, R H DENT, A J LAMPRECHT, P G NELSON, AJ
PHILLIPS*, P STUIVER , R S TENNANT, EP THERON.
* BRITISH DUTCH
REGISTERED OFFICE:
BARLOW PARK
KATHERINE STREET, SANDTON 2196,
SOUTH AFRICA
(P.O. BOX 782248, SANDTON 2146,
SOUTH AFRICA)
TRANSFER SECRETARIES:
MERCANTILE REGISTRARS LIMITED
11 DIAGONAL STREET,
JOHANNESBURG 2001, SOUTH AFRICA
(P.O. BOX 1053, JOHANNESBURG 2000,
SOUTH AFRICA)
THESE RESULTS AND OTHER INFORMATION IS AVAILABLE ON THE PPC INTERNET WEBSITE
WWW.PPC.CO.ZA
MEDIA RELEASE
9 NOVEMBER 2000
VALUE BASED MANAGEMENT HELPS PPC TO POST 32% EPS RISE
PPC OVERCAME STAGNANT DEMAND, HIGHER TAX AND A MORE CONSERVATIVE ACCOUNTING
POLICY TO LIFT EARNINGS BY 32% IN THE YEAR TO SEPTEMBER.
EARNINGS PER SHARE AFTER EXTRAORDINARY ITEMS WERE 518,6 CENTS (1999: 392,5
CENTS). PPC ADOPTED INTERNATIONAL ACCOUNTING STANDARDS, WHICH HAD THE EFFECT OF
DECREASING EARNINGS PER SHARE BY 3,2 CENTS PER SHARE IN THE YEAR TO SEPTEMBER
2000 AND INCREASING THOSE OF 1999 BY 19,4 CENTS.
WERE IT NOT FOR THE ACCOUNTING CHANGE, EARNINGS GROWTH WOULD HAVE BEEN MORE
THAN 40%. COMPARATIVE NUMBERS FOR THE WHOLE OF 1999 HAVE, HOWEVER, BEEN
ADJUSTED TO CONFORM WITH THE NEW ACCOUNTING POLICY AND ARE COMPARABLE.
A FINAL DIVIDEND OF 225 CENTS PER SHARE (185 CENTS PER SHARE) HAS BEEN DECLARED
(22% INCREASE) BRINGING THE TOTAL DIVIDENDS DECLARED FOR THE YEAR TO 315 CENTS
PER SHARE (270 CENTS PER SHARE).
DESCRIBING PROSPECTS, THE DIRECTORS FORECAST HIGHER EARNINGS AND CASH FLOWS IN
THE CURRENT YEAR AND ADD THAT THE COMPANY IS WELL POISED TO BENEFIT FROM ANY
IMPROVEMENT IN MARKET CONDITIONS.
THANKS LARGELY TO HEIGHTENED EFFICIENCY ARISING FROM THE VALUE BASED MANAGEMENT
PRINCIPLES (VBM) ADOPTED BY ALL BARLOWORLD COMPANIES, OPERATING PROFIT
INCREASED BY 29% TO R312,3-MILLION ON A TURNOVER INCREASE OF 2%.
JOHN GOMERSALL, CEO, SAID : "VBM, CREATES VALUE THROUGH SUPERIOR CASH FLOW
RETURNS, CUSTOMER SATISFACTION AND EMPLOYEE MOTIVATION. IT IS AIMED AT MAKING
US GLOBALLY COMPETITIVE. THIS PROGRAMME NOW INCORPORATES OUR GLOBAL
COMPETITIVENESS AND PEOPLE DEVELOPMENT PROGRAMMES AND PLAYED A MAJOR PART IN
ACHIEVING THESE PLEASING RESULTS. THE WHOLE PPC TEAM PLAYED THEIR PART IN
REALISING IMPROVED EFFICIENCIES AND LOWER COSTS, WHICH IS REFLECTED IN THE
IMPROVEMENT IN THE OPERATING MARGIN FROM 14,2% TO 18,4%."
STRONG CASH FLOWS AND REDUCED BORROWINGS HELPED TO CUT FINANCE COSTS BY 20% TO
R44,4-MILLION. INVESTMENT INCOME INCREASED BY 36% TO R41,7-MILLION.
EXCEPTIONAL ITEMS WERE R9,9-MILLION POSITIVE BEFORE TAX, COMPARED TO A LOSS OF
R12,9-MILLION IN THE COMPARABLE PERIOD.
THE TAX CHARGE ROSE TO R71,3-MILLION (R13,6-MILLION), WHICH GAVE THE GROUP AN
EFFECTIVE TAX RATE OF 22,3% (6,6%). THIS YEAR'S TAX CHARGE BENEFITED FROM A
R20,5-MILLION CREDIT IN RESPECT OF PRIOR YEAR ASSESSMENTS. IN 1999, PPC
RECEIVED A ONE-OFF DEFERRED TAX CREDIT OF R30,3-MILLION, FOLLOWING THE
REDUCTION OF THE COMPANY TAX RATE FROM 35% TO 30%.
CEMENT DEMAND IN GAUTENG AND THE WESTERN CAPE GREW SLIGHTLY BUT TOTAL DOMESTIC
DEMAND DECLINED BY 0,2%. THE DIRECTORS SAY LOW GROSS FIXED CAPITAL FORMATION,
HIGH REAL INTEREST RATES AND FLOODS IN THE FIRST HALF DELAYED THE RECOVERY IN
THE MARKET. EXPORT CLINKER MARKETS WERE INCREASINGLY COMPETITIVE.
PPC'S OWN DOMESTIC CEMENT SALES VOLUMES DECLINED BY 2,6% AS A RESULT OF THE
STRATEGY TO IMPROVE THE QUALITY OF THE CUSTOMER-BASE, MOVE OUT OF LESS
PROFITABLE MARKETS AND IMPROVE MARGINS GENERALLY. THANKS ALSO TO PRIOR YEAR
RESTRUCTURING, AND FURTHER PROGRESS ON THE VBM PROGRAMME, CEMENT OPERATING
PROFIT INCREASED BY 40% TO R279,1-MILLION.
LIME VOLUMES INCREASED BY 4% AS A RESULT OF THE IMPROVED OUTPUT BY SALDANHA
STEEL. DEMAND FROM THE GOLD INDUSTRY REMAINED STATIC. PPC SALDANHA MATERIAL
HANDLING OPERATED AT APPROXIMATELY 70% OF DESIGN CAPACITY. LIME OPERATING
PROFIT ROSE BY 32% TO R43-MILLION. PPC SALDANHA CONTRIBUTED TO PROFITABILITY
FOR THE FIRST TIME. PACKAGING AND LOGISTICS OPERATING PROFIT FELL BY 69% TO
R5-MILLION (R16,6-MILLION).
THE CONTRIBUTION OF ASSOCIATES MORE THAN TREBLED TO R11,1-MILLION
(R3,7-MILLION) THANKS TO A STRONGER PERFORMANCE FROM NATAL PORTLAND CEMENT AND
REDUCED LOSSES AT SLAGMENT.
THE CASH FLOW FOCUS OF VBM ALSO HELPED PPC TO PRODUCE A STRONGER BALANCE SHEET,
WITH THE CURRENT RATIO UP TO 2,4 (2,0) AND CASH HOLDINGS DOUBLED TO
R148,6-MILLION (R73,5-MILLION).
ENDS
ISSUED BY: ANDREA VISSER
MEROPA COMMUNICATIONS (PTY) LTD
TEL:011)784-1008
ON BEHALF OF:PPC
CONTACT:JOHN GOMERSALL
CHIEF EXECUTIVE OFFICER,
TEL:(011) 488-1780
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