Wrap Text
Reviewed Interim Results for the half-year ended 31 March 2013
PPC Ltd
(Incorporated in the Republic of South Africa)
(Company registration number 1892/000667/06)
JSE code: PPC JSE ISIN: ZAE 000170049
ZSE code: PPC ZSE ISIN: ZWE 000096475
Reviewed interim results for the half-year ended 31 March 2013
- Improvement in South African and Zimbabwean cement sales
- Cash generated from operations up 20%
- Normalised earnings per share increased by 4%
- Tangible progress with our rest of Africa expansion strategy
- Technical issues at Dwaalboom resolved
COMMENTARY
Ketso Gordhan, CEO, said: We are pleased to report that PPCs cement sales volumes in Zimbabwe and South Africa have
increased for the period. This encouraging trend was, however, tempered by weakness in cement sales in Botswana as well as
lower demand in the lime and aggregates divisions. We remain optimistic that we will continue to progress with further
projects in line with our stated strategy in the rest of Africa in the near future.
PPCs total cement sales volumes rose by 6% for the period under review, mainly as a result of continued strong growth
in Zimbabwe and an improvement in South African cement volumes. Group revenue increased by 8% to R3 812 million (2012:
R3 529 million) on the back of increased volumes, improved cement pricing and the favourable impact of the devaluation
of the rand against the US dollar and Botswana pula. Group revenue was impacted by a 16% drop in revenue for the lime
division as a result of a 20% decline in sales volumes.
Costs of sales of R2 569 million were 9% higher (2012: R2 347 million), with electricity and depreciation rising by
18% and 11% respectively. Lower coal costs helped to offset these and the costs related to technical issues at our
Dwaalboom factory.
Administration and other operating expenditure increased by 19% to R381 million (2012: R319 million). This increase was due
to additional costs incurred in executing our African expansion including the finalisation of the acquisition of Cimerwa in Rwanda.
EBITDA increased by 3% to R1 123 million (2012: R1 093 million) and operating profit excluding the impact of BEE IFRS
2 charges and Zimbabwe indigenisation costs was flat when compared to the previous reporting period at R862 million
(2012: R863 million). During the review period both group EBITDA and operating margins contracted; recording 30% (2012: 31%)
and 23% (2012: 24%) respectively.
Cash generated from operations rose to R1 070 million (2012: R889 million) and the conversion from EBITDA to operating
cash flow improved to 94% (2012: 81%). Capital investment during the period amounted to R294 million (2012: R277
million) and the groups net debt position remains conservative at R3 916 million (2012: R3 731 million).
Tax of R245 million (2012: R281 million) was lower than in the previous reporting period, due to the removal of the
STC charge on dividends paid, following changes in tax legislation. The STC charge for 2012 was R53 million.
Earnings per share ended 21% lower at 62 cents per share (2012: 78 cents per share), however, when IFRS 2 charges and
Zimbabwe indigenisation costs are excluded (normalised), earnings rise to 83 cents per share; a growth of 4% over the
prior period.
The companys dividend policy remains unchanged at an annual dividend cover of between 1,2 and 1,5 times normalised
earnings. The directors have declared an interim dividend of 38 cents per share (2012: 38 cents per share).
Cement
PPCs South African cement sales volumes increased by 6% and average selling prices were up by 4%. Volume growth came
from both the inland and Western Cape regions. Industrial action at Medupi in the Limpopo Province lowered sales volumes
in that region while volumes in the Eastern Cape came under pressure due to increased competition from imported cement.
Technical process issues on kiln 2 at Dwaalboom resulted in lower than planned production output. This required that
customer demand be satisfied through sub-optimal sourcing. All technical issues have now been resolved and the factory is
again meeting expectations.
The R100 million modernisation of Slurrys finishing mill 4 was concluded within budget in May 2013. This upgrade and
refurbishment will improve mill reliability, efficiency and environmental performance.
Sales volume growth of almost 15% was recorded for our Zimbabwean operation. This operation achieved a pleasing cost
performance with higher volumes improving fixed cost absorption as well as the non-recurrence of the imported clinker
costs of 2012.
PPC Botswanas cement sales remain under some pressure due to low levels of demand as well as aggressive competitor
activity.
Exports to Mozambique declined further and continue to be impacted by increased competition, largely due to cement
imported from Asia.
Lime and aggregates
The decline in demand for lime for the period under review was due to operational challenges in the local steel and
alloys industries. Operating profit consequently fell to R41 million (2012: R95 million).
Revenues in the aggregates division remained in line with 2012 despite declining volumes in both South Africa and
Botswana. An improved revenue per ton was achieved as a result of increased sales of higher value products. Following a
review of the projected financial performance of the Quarries of Botswana business unit and the current difficulties being
experienced in that market, an impairment charge of R12 million has been included in exceptional items.
Board changes
With effect from 14 February 2013, Mr Sello Helepi resigned as an executive director of PPC and its associated boards
to pursue other interests outside the PPC group. Mr Helepi joined PPC during 2007 and was appointed to the board during
2009.
Prospects and strategy
The business is making good progress with its strategy to grow into the rest of the African continent. The
construction of the Habesha cement plant, in Ethiopia, has been delayed due to some initial financing constraints, however we are
confident these constraints will be overcome and that plant construction will commence in October 2013. Following the
acquisition of Rwandas only cement producer, Cimerwa Ltd, both PPCs technical and project teams are now providing Cimerwa
with onsite support.
Our operations in Zimbabwe celebrated their centenary in February 2013, boasting 100 years of being an integral part
of Zimbabwes infrastructure development. This experience allows us to make more informed decisions in Zimbabwe and we
remain optimistic about economic developments in this country. We are on track with the feasibility study for a new one
million ton plant in the north east of the country to meet growing demand.
PPC is also in the feasibility phase of further projects involving two other countries and we are confident that
further progress on this strategy will be made in the second half of the year.
We are particularly pleased by the successful entry of PPC into the debt capital markets and believe that the company
is well positioned to ensure the financing for our expansion projects.
The positive trend in South African cement demand is expected to continue in the near to medium term. The key to
improved growth in South Africa remains the governments execution of their infrastructure programme. PPC is exploring a
number of avenues to see how it can play a complementary role and add momentum in its execution.
On behalf of the board
BL Sibiya KM Gordhan MMT Ramano
Chairman Chief executive officer Chief financial officer 15 May 2013
INTERIM DIVIDEND ANNOUNCEMENT
Notice is hereby given that the interim ordinary gross dividend of 38 cents per share has been declared payable to
ordinary shareholders in respect of the six months ended 31 March 2013. This dividend will be paid out of profits as
determined by the directors.
In terms of dividends tax, the following information is disclosed:
- the local dividends tax rate is 15%
- no STC credits have been utilised in this declaration and accordingly the dividend to utilise in determining the
dividends tax is 38 cents per share
- the dividends tax to be withheld by the company amounts to 5,7 cents per share where no exemption is applicable
- the net dividend payable to shareholders who are not exempt from dividends tax amounts to 32,3 cents per share
- the issued share capital of the company at the declaration date comprises 605 379 648 shares
- the companys income tax reference number is 9460015606
The important dates pertaining to this dividend for shareholders trading on the JSE Limited are as follows:
Declaration date Wednesday, 15 May 2013
Last day to trade Friday, 31 May 2013
Shares trade Ex dividend Monday, 3 June 2013
Record date Friday, 7 June 2013
Payment date Monday, 10 June 2013
Share certificates may not be dematerialised or rematerialised between Monday, 3 June 2013 and Friday, 7 June 2013,
both dates inclusive. Transfers between the South African and Zimbabwean registers may not take place between
Monday, 3 June and Friday, 7 June 2013, both dates inclusive.
Zimbabwe
The important dates pertaining to this dividend for shareholders trading on the Zimbabwe Stock Exchange are as
follows:
Shares trade Ex dividend Monday, 3 June 2013
Record date Friday, 7 June 2013
Payment date, on or shortly after Monday, 10 June 2013
The register of members in Zimbabwe will be closed from Monday, 3 June 2013 to Friday, 7 June 2013, both days
inclusive, for the purpose of determining those shareholders to whom the dividend will be paid. The dividend payable to
shareholders registered in Zimbabwe will be paid in South African rand.
By order of the board
JHDLR Snyman 15 May 2013
Group company secretary Sandton
CONDENSED CONSOLIDATED INCOME STATEMENT
Six months ended Year ended
31 March 31 March 30 Sept
2013 2012 2012
Reviewed Reviewed % Audited
Rm Rm Change Rm
Revenue 3 812 3 529 8 7 346
Cost of sales 2 569 2 347 (9) 4 809
Gross profit 1 243 1 182 5 2 537
Administration and other operating expenditure 381 319 (19) 671
Operating profit before items listed below: 862 863 1 866
BBBEE IFRS 2 charges 29 5 123
Zimbabwe indigenisation costs 82 - -
Operating profit 751 858 (12) 1 743
Finance costs (refer note 3) 184 186 1 377
Investment income 10 14 (29) 30
Profit before exceptional items 577 686 (16) 1 396
Exceptional items (12) - -
Share of associates' profit 5 2 7
Profit before taxation 570 688 (17) 1 403
Taxation 245 281 13 557
Profit for the period 325 407 (20) 846
Attributable to:~
- Ordinary shareholders 295 369 (20) 768
- Other shareholders 30 38 (20) 78
325 407 (20) 846
Earnings per share (cents)
- basic 62 78 (21) 161
- diluted 61 77 (21) 159
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the period 325 407 846
Other comprehensive income, net of taxation 79 (28) 29
Effect of translation of foreign operations 58 (43) 17
Effect of cash flow hedges 21 14 14
Revaluation of available-for-sale financial investments - - (4)
Taxation on other comprehensive income - 1 2
Total comprehensive income 404 379 875
~ Profit for the period is apportioned between ordinary and other shareholders based on the number of shares held by each
category of shareholders as a ratio of total shares in issue (refer note 5).
NORMALISED EARNINGS PER SHARE*
- Earnings per share 83 80 4 185
- Headline earnings per share (refer note 4) 85 80 6 185
*Normalised earnings per share is calculated before the impact of BBBEE IFRS 2 charges and Zimbabwe indigenisation costs.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 March 31 March 30 Sept
2013 2012 2012
Reviewed Reviewed Audited
Rm Rm Rm
ASSETS
Non-current assets 5 777 4 655 4 998
Property, plant and equipment 5 035 4 318 4 483
Intangible assets 341 129 139
Non-current financial assets 126 117 106
Investments in associates 275 91 267
Deferred taxation asset - - 3
Current assets 2 245 1 819 1 909
Inventories 918 802 841
Trade and other receivables 1 063 896 820
Cash and cash equivalents 264 121 248
Total assets 8 022 6 474 6 907
EQUITY AND LIABILITIES
Capital and reserves
Stated capital (refer note 5) (1 236) (1 180) (1 181)
Other reserves 446 147 282
Retained profit 1 843 1 784 2 075
Equity attributable to shareholders of PPC Ltd 1 053 751 1 176
Non-controlling interest 512 - -
Total equity 1 565 751 1 176
Non-current liabilities 3 827 3 853 4 008
Deferred taxation liabilities 988 754 859
Long-term borrowings (refer note 6) 2 451 2 686 2 716
Provisions and other non-current liabilities 388 413 433
Current liabilities 2 630 1 870 1 723
Short-term borrowings (refer note 6) 1 729 1 166 869
Trade and other payables and provisions 901 704 854
Total equity and liabilities 8 022 6 474 6 907
Net asset value per share (cents) 202 144 225
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended Year ended
31 March 31 March 30 Sept
2013 2012 2012
Reviewed Reviewed Audited
Rm Rm Rm
Total equity
Balance at beginning of the period 1 176 955 955
Total comprehensive income 404 379 875
Shares purchase in terms of the FSP share
incentive scheme treated as treasury shares (refer note 5) (55) (89) (89)
Securities transfer taxation on cancellation of
treasury shares (refer note 5) - - (1)
Dividends paid (569) (505) (706)
IFRS 2 charges 97 11 142
- BBBEE IFRS 2 charges 29 5 123
- Zimbabwe indigenisation IFRS 2 charges 55 - -
- FSP IFRS 2 charges 13 6 19
Non-controlling interest arising on acquisition of subsidiary 512 - -
Balance at end of the period 1 565 751 1 176
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended Year ended
31 March 31 March 30 Sept
2013 2012 2012
Reviewed Reviewed Audited
Rm Rm Rm
Cash flow from operating activities
Operating cash flows before movements in working capital 1 074 1 091 2 317
Net movement in working capital (4) (202) (33)
Cash generated from operations 1 070 889 2 284
Net finance costs paid and dividends received (104) (105) (216)
Taxation paid (230) (261) (417)
Cash available from operations 736 523 1 651
Dividends paid (569) (505) (706)
Net cash flow from operating activities 167 18 945
Investment in property, plant and equipment (294) (277) (609)
Acquisition of subsidiary companies (refer note 7) (140) (42) (42)
Acquisition of equity in associates - - (172)
Other investing movements (26) - (26)
Net cash flow from investing activities (460) (319) (849)
Proceeds received from issuance of corporate bond (refer note 6) 650 - -
Purchase of shares in terms of the FSP share scheme (refer note 5)^ (55) (89) (89)
Other net financing movements (302) 287 17
Net cash flow from financing activities 293 198 (72)
Net (decrease)/increase in cash and cash equivalents - (103) 24
Cash and cash equivalents at beginning of the period 248 224 224
Cash and cash equivalents acquired on acquisition of subsidiary company 6 - -
Impact of exchange rate differences on opening cash and cash equivalents 10 - -
Cash and cash equivalents at end of the period 264 121 248
Cash earnings per share (cents)* 142 100 315
* Cash earnings per share is calculated using cash available from operations divided by the total weighted average number
of shares in issue for the period (refer note 5).
^ Shares purchased in terms of the FSP share scheme have been reclassified to financing activities as they represent movements
in equity.
NOTES TO THE REVIEWED HALF-YEAR RESULTS
1. Basis of preparation
The condensed consolidated interim financial report for the six months ended 31 March 2013 has been prepared in accordance
with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS),
as issued by the International Accounting Standards Board (in particular International Accounting Standard 34 Interim Financial Reporting),
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by
Financial Reporting Standards Council, the JSE Limiteds Listings Requirements and the requirements of the South African Companies Act.
This report was compiled under the supervision of the chief financial officer, MMT Ramano CA(SA).
The accounting policies and methods of computation used are consistent with those used in the preparation of the annual financial statements
for the year ended 30 September 2012, except for the following revised accounting standards and interpretations that were adopted during the
period, and which did not have an impact on the reported results:
IAS 1 (amendment) Presentation of Items of Other Comprehensive Income
IAS 12 Deferred Taxation (recovery of underlying assets)
The condensed consolidated interim financial information for the period ended 31 March 2013 has been reviewed by the groups auditors, Deloitte & Touche.
The review was conducted in accordance with International Standard on Review Engagement 2410 Review of Interim Financial Information performed by the
Independent Auditor of the Entity. A copy of their unmodified review report is available for inspection at the companys registered office. Any reference
to future financial performance included in this announcement, has not been reviewed or reported on by the groups auditors.
31 March 31 March 30 Sept
2013 2012 2012
Reviewed Reviewed Audited
Rm Rm Rm
2. Profit before taxation
Included in profit before taxation are:
Amortisation of intangible assets 17 11 22
Consultation fees incurred on BBBEE transaction - 5 15
Depreciation 244 219 439
Donation made in terms of PPC Zimbabwes indigenisation transaction 27 - -
Impairment losses on plant and equipment and intangible assets 12 - -
IFRS 2 charges:
- BBBEE IFRS 2 charges 29 5 123
- Zimbabwe indigenisation IFRS 2 charges 55 - -
- cash settled IFRS 2 charges 2 19 22
- equity settled IFRS 2 charges 13 6 19
3. Finance costs
Bank and other borrowings 36 24 52
Long-term loans 82 83 166
BBBEE funding transaction 65 62 136
- dividends on redeemable preference shares 29 29 68
- long-term borrowings 36 33 68
Finance lease interest 1 2 4
Fair value (gains)/losses on financial instruments (9) 5 3
Unwinding of discount on rehabilitation provisions 10 11 22
185 187 383
Capitalised to plant and equipment (1) (1) (6)
184 186 377
4. Headline earnings per share
Headline earnings per share (cents)
- basic 64 78 162
- diluted 63 77 160
- basic (excluding BBBEE IFRS 2 and Zimbabwe indigenisation charges) 85 80 185
- diluted (excluding BBBEE IFRS 2 and Zimbabwe indigenisation charges) 84 79 183
Determination of headline earnings per share (cents)
Earnings per share 62 78 161
Adjusted for:
- Impairment of plant and equipment and intangible assets 2 - -
- Loss on disposal of property, plant and equipment and
intangible assets - - 1
Headline earnings per share 64 78 162
BBBEE IFRS 2 and Zimbabwe indigenisation charges 21 2 23
Headline earnings per share (excluding BBBEE IFRS 2 and Zimbabwe
indigenisation charges) 85 80 185
Headline earnings (Rm)
Profit for the period 325 407 846
Impairment losses on financial assets - - 1
Impairment of plant and equipment and intangible assets 12 - -
Taxation on impairment of plant and equipment and intangible assets (1) - -
Reversal of impairment - - (1)
Loss on disposal of property, plant and equipment and
intangible assets - - 3
Taxation on loss on disposal of property, plant and equipment
and intangible assets - - (1)
Headline earnings 336 407 848
Attributable to:
- Ordinary shareholders 305 369 769
- Other shareholders 31 38 79
Headline earnings 336 407 848
BBBEE IFRS 2 charges and Zimbabwe indigenisation costs 111 5 123
Headline earnings (excluding BBBEE IFRS 2 and Zimbabwe
indigenisation charges) 447 412 971
Attributable to:
- Ordinary shareholders 405 374 881
- Other shareholders 42 38 90
31 March 31 March 30 Sept
2013 2012 2012
Reviewed Reviewed Audited
5. Stated capital
Number of shares and weighted average number of shares Shares (000) Shares (000) Shares (000)
Number of shares
Total shares in issue at beginning of the period 566 030 586 170 586 170
Add: New shares issued in terms of the second BBBEE transaction± 39 350 - -
Less: Treasury shares owned by wholly owned group subsidiary company - (20 140) -
Less: Cancellation of treasury shares owned by wholly owned group
subsidiary company^ - - (20 140)
Less: Shares held by consolidated BBBEE trusts and funding SPVs
treated as treasury shares* (37 972) (37 991) (37 991)
Less: New shares issued in terms of the second BBBEE transaction
treated as treasury shares± (39 350) - -
Less: Shares held by consolidated Porthold Trust (Private) Limited
treated as treasury shares@ (1 285) (1 285) (1 285)
Less: Shares purchased in terms of the FSP share incentive scheme
treated as treasury shares# (4 745) (3 080) (3 080)
Total shares in issue (net of treasury shares) 522 028 523 674 523 674
- Ordinary 473 470 475 116 475 116
- Other$ 48 558 48 558 48 558
Weighted average number of shares
- Used for earnings and headline earnings per share 474 794 476 914 476 009
- Used for dilutive earnings and headline earnings per share 481 920 482 371 481 470
- Used for cash earnings per share 522 028 523 674 524 567
Stated capital~
Balance at beginning of the period (1 181) - -
Transfer from share capital and premium - - (1 181)
Shares purchased in terms of the FSP share incentive scheme
treated as treasury shares# (55) - -
Balance at end of the period (1 236) - (1 181)
Issued share capital
Balance at beginning of the period - 53 53
Transfer to stated capital~ - - (53)
Balance at end of the period - 53 -
Share premium
Balance at beginning of the period - (1 144) (1 144)
Securities transfer taxation on cancellation of shares^ - - (1)
Shares purchased in terms of the FSP share incentive scheme
treated as treasury shares# - (89) (89)
Balance at end of the period - (1 233) (1 234)
Transfer to stated capital~ - - 1 234
Total issued share capital and premium - (1 180) -
± Shares issued in terms of the second BBBEE transaction which was approved in September 2012. This transaction was facilitated by means of a
notional vendor funding (NVF) mechanism resulting in the new shares only participating in 20% of the dividends declared by PPC until the end
of the NVF period, 30 September 2019. The entities holding these shares are consolidated into the PPC group during the term of the transaction
in accordance with IFRS.
^ In 2012, the treasury shares owned by PPC Cement (Pty) Ltd were bought back by PPC Ltd and cancelled after the repurchase.
* In terms of IFRS SIC Interpretation 12 (Consolidation - Special Purpose Entities), certain of the BBBEE trusts and trust funding SPVs are consolidated,
and as a result, shares owned by these entities are carried as treasury shares on consolidation.
@ Shares owned by a Zimbabwean employee trust company treated as treasury shares in terms of SIC Interpretation 12.
# In 2011 and 2012, shareholders approved the forfeitable share plan (FSP) to retain and incentivise employees of PPC. During the period, the company acquired
1 664 880 (2012: 3 079 853) shares on the open market and these shares are carried as treasury shares.
$ The shares issued to the Strategic Black Partners and Community Service Groups, in terms of PPCs first BBBEE transaction, have been pledged as security for
their funding obligations and as a result are treated as a separate class of equity.
~ In 2012, the company increased its authorised ordinary shares and changed its par value ordinary shares to ordinary shares with no nominal or par value.
The preferences, rights, limitations and other terms attaching to the no par value shares in the company have the same preferences, rights, limitations and other
terms which were attached to the par value authorised ordinary shares.
6. Borrowings
- Long-term loan* 1 516 1 517 1 518
- Corporate bonds$ 650 - -
- Finance lease liability@ - 14 -
- Consolidated in terms of acquistion of subsidiary company# 84 - -
- Preference shares^ 88 110 110
2 338 1 641 1 628
BBBEE funding transaction~ 113 1 045 1 088
- Preference shares 113 473 495
- Long-term borrowings - 572 593
Total long-term borrowings 2 451 2 686 2 716
Short-term borrowings and short-term portion of long-term borrowings 1 729 1 166 869
Total borrowings 4 180 3 852 3 585
* Comprises a bullet loan, bearing interest at a fixed rate of 10,86% p.a., and is repayable in December 2016, with interest payable
semi-annually.
$ In March 2013, PPC issued a three-year unsecured floating rate corporate bond at a variable coupon of three-month JIBAR plus 1,26% per annum. This bond was issued
under the companys R6 billion Domestic Medium Term Note programme.
@ Bears interest at a fixed rate of 13,1% with interest and capital repayable annually with the last payment payable in April 2013.
# Loan assumed on acquisition of Cimerwa Ltd. Loan bears interest at a rate of 16% p.a., and is repayable in 2017. The loan is denominated in US dollars and is secured
against Cimerwas land and building.
^ Redeemable preference shares bearing semi-annual dividends, with variable interest rates linked to prime and fixed rates between 9,24% to 9,37% p.a. and compulsory
annual redemptions ending December 2016.
~ Redeemable preference shares bearing semi-annual dividends, with variable interest rates linked to prime and compulsory annual redemptions until December 2016, and
loans bearing interest, after giving effect to fixed-for-variable interest rates swaps, at a rate of 11.36% p.a., with interest and capital repayable in December 2013.
As part of the funding is repayable in December 2013, R972 million has been reflected under short-term borrowings.
In terms of IFRS, these long-term borrowings have been consolidated as PPC Ltd has provided guarantees for funding that had an outstanding balance of R1 081 million as
at 31 March 2013 (March 2012: R1 015 million and September 2012: R1 066 million).
The companys borrowing powers are not restricted.
7. Acquisition of subsidiary companies
Property, plant and equipment 432 26 26
Intangible assets (including goodwill) 219 28 28
Current assets 751 5 5
Long-term provisions and deferred taxation (187) (7) (7)
Current liabilities (74) - -
Non-controlling interest (512) - -
Total consideration 629 52 52
Paid to Cimerwa for new equity in the company 181 - -
Payable to Cimerwa for new equity in the company 312 - -
Paid to previous shareholders of Cimerwa 136 - -
629 - -
Paid to previous shareholders of Botswana quarries 4 42 42
Payable to previous shareholders of Botswana quarries - 10 10
4 52 52
Impact of the transactions on the results for the respective period ended:
Revenue 26 9 18
Operating loss (5) (3) (4)
Loss attributable to shareholder 7 (4) (8)
Impact on EPS and HEPS (cents per share) 1 (1) (1)
In January 2013 PPC acquired a 51% equity stake in a Rwandan cement company, Cimerwa Ltd. The transaction value amounts to US$69,4 million of which US$15 million was paid
to previous shareholders of the company, while a further US$20 million was paid to subscribe for shares in Cimerwa. The remaining purchase consideration, for further
subscription in shares in Cimerwa, will be paid in three tranches, with the last payment being in December 2013. As the company is consolidated and US$54,4 million is payable
to Cimerwa, only the US$15 million payable external to the PPC group is reflected as a cash flow outside the consolidated PPC group. The fair values of assets acquired and
liabilities assumed were determined based on provisional allocation of the total consideration.
In October 2011 all conditions precedent with regards to the transaction to acquire three aggregate quarries in Botswana were met. The transaction value amounted to R52 million
and the consideration paid amounted to R4 million (2012: R42 million). The purchase consideration outstanding is payable on the second anniversary of the transaction.
8. Commitments
- Contracted capital commitments 1 018 180 192
- Approved capital commitments 164 307 125
Capital commitments* 1 182 487 317
Operating lease commitments 18 17 19
1 200 504 336
*Excludes the second 25% tranche on acquisition of Pronto Holdings (Pty) Limited which is payable in June 2013 and the remaining 50% payable in 2014. The purchase consideration is determined
using an EBITDA multiple less net debt.
Commitments for capital expenditure are stated in current values which, together with expected price escalations, will be financed from surplus cash generated from operations
and borrowing facilities available to the group.
9. Segment analysis
The group discloses its operating segments according to the business units which are managed by the group executive committee. These segments comprise cement, lime, aggregates
and BBBEE.
Revenue
Cement 3 329 2 975 6 246
Lime 365 433 838
Aggregates 138 138 299
3 832 3 546 7 383
Less: Inter-segment revenue (20) (17) (37)
Total revenue 3 812 3 529 7 346
- South Africa 2 959 2 847 5 786
- Rest of Africa 853 682 1 560
EBITDA
Cement 1 065 965 2 087
Lime 61 113 188
Aggregates 9 18 56
BBBEE trusts and trust funding SPVs (12) (3) (4)
EBITDA 1 123 1 093 2 327
Operating profit
Cement 834 763 1 682
Lime 41 95 151
Aggregates (1) 8 37
BBBEE trusts and trust funding SPVs (12) (3) (4)
Operating profit before items listed below: 862 863 1 866
BBBEE IFRS 2 charges (29) (5) (123)
Zimbabwe indigenisation costs (82) - -
Operating profit 751 858 1 743
Assets
Cement 7 289 5 722 6 153
Lime 463 478 467
Aggregates 268 272 285
BBBEE trusts and trust funding SPVs 2 2 2
Total assets 8 022 6 474 6 907
10. Events after the reporting date
There are no events that occurred after the reporting date that may have a material impact on the groups reported financial position at 31 March 2013.
ADMINISTRATION
Directors
BL Sibiya (Chairman), KM Gordhan (Chief executive officer), S Abdul Kader, P Esterhuysen, ZJ Kganyago,
AJ Lamprecht, NB Langa-Royds, MP Malungani, S Mhlarhi, B Modise, MMT Ramano, TDA Ross, J Shibambo
Registered office
180 Katherine Street, Sandton, South Africa
PO Box 787416, Sandton 2146, South Africa
Transfer secretaries
Link Market Services SA (Pty) Ltd
11 Diagonal Street, Johannesburg, South Africa
PO Box 4844, Johannesburg 2000, South Africa
Transfer secretaries Zimbabwe
Corpserve (Private) Limited
4th Floor, Intermarket Centre, Corner First Street/Kwame Nkrumah Avenue
Harare, Zimbabwe
PO Box 2208, Harare, Zimbabwe
Company Sponsor
Merrill Lynch South Africa (Pty) Limited
DISCLAIMER
This document including, without limitation, those statements concerning the demand outlook, PPCs expansion projects
and its capital resources and expenditure, contain certain forward-looking views. By their nature, forward-looking
statements involve risk and uncertainty and although PPC believes that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly,
results could differ materially from those set out in the forward-looking statements as a result of, among other factors,
changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory
environment and other government action and business and operational risk management. While PPC takes reasonable care to
ensure the accuracy of the information presented, PPC accepts no responsibility for any consequential, indirect, special
or incidental damages, whether foreseeable or unforeseeable, based on claims arising out of misrepresentation or
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