PPC - Efficiency gains and growing demand boosts PPC results

PPC - Efficiency gains and growing demand boosts PPC results                    
Pretoria Portland Cement Company Limited - Media Release                        
ISIN:     ZAE000005559                                                          
Share code:    PPC                                                              
7 November 2002                                                                 
Growing demand for cement, together with a significant increase in regional     
export volumes, helped PPC to achieve a 17% increase in headline earnings per   
share to 829.5 cents per share (2001: 709.7 cents) in the year to September     
2002.                                                                           
A final dividend of 400 cents has been declared, making a total of 535 cents    
declared for the year, an improvement of 16%. In addition, thanks to the cash   
flow from the sale of Natal Portland Cement Co. (Pty) Ltd (NPC) and Ash         
Resources (Pty) Ltd. a special dividend of R6.00 per share has been declared.   
Chief Executive, John Gomersall said, "Group revenues rose by 26% to R2,6       
billion due to increased sales coupled with the consolidation of Porthold for   
the first time."                                                                
Operating profit surged by 39% to R612.2 million and profit before exceptional  
items by 37% to R643.9 million. "This 39% operating profit improvement on a     
turnover increase of only 26%, reflects the enormous efforts made by the PPC    
Team to become globally competitive and the success of the Value Based          
Management and Kambuku process," said Gomersall.                                
PPC recorded an exceptional profit of R158.9 million (2001: R57.7 million). This
arose mainly from the R262.7 million capital profit on the sale of NPC less the 
write-down of goodwill in respect of Porthold of R101.9 million.                
PPC Cement SA reported an increase in local cement volumes during the second    
half of 2002, ending the year 5% up on the industry average of 4.3% over last   
year.  The division also achieved a 35% increase in export volumes and this     
together with the weaker Rand boosted export competitiveness and profitability  
during the year.   PPC Cement operating profit including income from associate  
companies increased by 39% from R404-million to R561,4-million.                 
"We have also seen a steady growth in our new dry mix product, SureMix, which   
was launched during the last quarter of 2001," said Gomersall.                  
The Kambuku process has continued to reap rewards for the cement division       
through its improvements in environmental performance, efficiencies and cost    
savings.  This was demonstrated through all PPC Cement`s SA operations achieving
ISO14001 environmental performance certification.                               
Difficult circumstances, hyper-inflationary cost pressures and regulated cement 
prices led to Porthold reporting an operating loss of R8.7-million.  Despite    
these unfavourable conditions, Porthold achieved good savings in production     
costs and stronger levels of domestic and export sales.                         
"It is unlikely that Porthold will contribute to our earnings in 2003.  However,
in the medium term this business is well positioned to benefit from any economic
improvement in Zimbabwe and from export opportunities," continued Gomersall.    
PPC Lime reported an increase of 34% in operating profit from R49.9-million to  
R66.8-million. The re-negotiation of long term sales contracts as well as the   
Value Based Management focus on reducing costs and improving efficiencies       
contributed to the increase in operating profit.                                
"An impressive example of improved efficiencies is demonstrated by the success  
of our Lime Acres factory which achieved the lowest ever level of energy        
consumption per ton through waste burning and improved ultilisation of energy   
efficient kilns," continued Gomersall.                                          
Operating profit at Afripack increased by 63% from R10.8-million to R17.6-      
million. The business climate for packaging improved markedly during the second 
half due to a strong increase in volumes and revenues, and exports doubled.     
"We are expecting continued growth in cement sales volumes in the year ahead,   
due to increasing trends in gross fixed capital formation (GFCF) which is       
evident in all sectors of the South African economy. This growth should also be 
reflected in lime and burnt dolomite sales, with Afripack also benefiting from  
increased sales and higher capacity utilisation.                                
"Operational cash flows should remain strong and no major capital expenditure is
planned for 2003. We expect a further improvement in operating profits from all 
our businesses and the group remains well poised to benefit from any            
opportunities that may arise," concluded Gomersall.                             
Ends                                                                            
Issued by:Andrea Visser                                                         
Meropa Communications                                                           
Tel:(011) 772-1000                                                              
On behalf of:PPC                                                                
Contact:Peter Nelson                                                            
Tel:(011) 488-1700                                                              
Date: 07/11/2002 09:20:38 AM Supplied by www.sharenet.co.za                     
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