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PPC - Pretoria Portland Cement Company Limited - Unaudited Interim Results For

Release Date: 12/05/2009 07:20
Code(s): PPC
Wrap Text

PPC - Pretoria Portland Cement Company Limited - Unaudited Interim Results For The Half-Year Ended 31 March 2009 Pretoria Portland Cement Company Limited (Incorporated in the Republic of South Africa) (Company registration number: 1892/000667/06) JSE Code: PPC ISIN: ZAE000125886 ("PPC" or "the company") Unaudited Interim Results For The Half-Year Ended 31 March 2009 PPC delivers solid interim performance in challenging economic environment Highlight of Interim Financial results 2009: - STRONG CASH GENERATION OF R1.03 BILLION - REVENUES UP 12% TO R3.3 BILLION - NEW DWAALBOOM KILN CONTRIBUTING TO IMPROVED EFFICIENCIES - REDUCING INPUT COSTS POSITIVE FOR 2ND HALF Despite challenging economic conditions Pretoria Portland Cement Limited (PPC) delivered a robust performance. The company today released their interim results for the half year ended 31 March 2009. Commenting on the results John Gomersall, chief executive officer of PPC said: "PPC has again managed to produce a solid set of results with strong operating cash flows, despite our economy experiencing the effects of the global crisis.`` Group revenue increased by 12% to R3.3billion (2008: R2.9 billion) whilst operating profit before the IFRS 2 charge for the BBBEE transaction rose 2% to R1 100 million (2008: R1 077 million). Cash generated from operations remained strong at R1 026 million (2008: R1 106 million) and earnings per share, excluding BBBEE IFRS 2 charges declined by 16 % to 105.8 cents (2008: 125.8 cents). In view of the continued strong cash generation, the directors have declared an unchanged interim dividend of 45 cents per share (2008: 45 cents per share). The company expects to maintain dividend cover for the full year in the stated range of 1,2 to 1,5 times based on earnings before the IFRS 2 charge resulting from the BBBEE transaction. While industry regional cement demand declined by 7.5% for the period under review, rural demand showed positive growth, reflecting both the increased level of social grants and consumers` increased access to building supplies in these areas. Demand in the construction sector increased by 12%, indicating that infrastructure project offtake continues to grow, helping to partially offset the slow-down in the residential sector. PPC`s total regional sales volumes ended only 6% below last year benefiting from growing demand from major projects and the continued growth in rural demand and in the Botswana market that helped offset the lower demand in coastal markets. PPC`s inland market share increased in most bag markets and through several major infrastructural projects that are now consuming cement and this helped offset the decline in the coastal markets. The group EBITDA grew by 5% to R1 245 million (2008: R1 182 million). The group EBITDA percentage margin decreased compared to the same period last year, reflecting the lower lime and cement volumes and continued cost increases. The cement EBITDA margin dropped 1.7 percentage points as the consistently high input cost increases experienced since last year were only partially recovered by the January selling price increase in the second quarter. The cost recovery effect thereof will be more significant in the second half. The new Dwaalboom plant contributed to efficiencies in production and together with improved distribution costs and declining input costs, the second half should see a recovery in EBITDA margins for the Group for the full year results expected to be announced in November. Gomersall added: "In view of expected cost reductions and the current economic situation, it is possible that our normal mid-year selling price increase may be deferred. We anticipate regaining the EBITDA margin eroded since the beginning of 2008 during the next six month reporting period and well into 2010." The company`s outlook statement said that the government`s commitment to infrastructural development indicated that growth in Gross Fixed Capital Formation was likely to continue well beyond 2010. Additionally, further reductions in SA interest rates are likely to generate some resumption of activity in the residential and other interest rate sensitive sectors later this year and into 2010. In the meantime, rural demand should continue to under-pin bagged cement demand. Gomersall concluded: "Although there are some positive signs, the company believes industry regional cement demand for this financial year may reflect a decline of up to 10% on last year`s volumes. We remain confident that, given the economic circumstances, a solid performance reflecting strong operating cash flows will be reported for the full year. A webcast of PPC`s interim results presentation will be available at www.ppc.co.za from 11h00 12 May 2008 For further media enquiries please contact; PPC John Gomersall, CEO Tel: 011 386 9000/9059 Kevin Odendaal, IR College Hill Jacques de Bie Tel: 011 447 3030 Nandile Ngubentombi 12 May 2009 Sponsor Merrill Lynch South Africa (Pty) Limited Date: 12/05/2009 07:20:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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