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Unaudited interim report for the half-year ended 31 March 2015
PPC Ltd
(Incorporated in the Republic of South Africa)
(Company registration number: 1892/000667/06)
JSE Code: PPC
JSE ISIN: ZAE 00017049
ZSE Code: PPC
Unaudited interim report for the half-year ended 31 March 2015
- Revenue up 9% to R4,5 billion
- 28% of revenue generated from outside South Africa
- Cash generated from operations up 46% to over R1,1 billion
- Headline earnings per share of 60 cents per share
- EBITDA of R1,1 billion, down 4%
- Interim dividend of 24 cents per share
- Cold commissioning of 600 000 ton per annum plant in Rwanda has commenced
- Diverse operating portfolio has cushioned weakness in core South African market
Commentary
Darryll Castle, CEO, said: “PPC’s group cement sales volumes rose by 5% above last year, with strong demand growth
in our African businesses offsetting lower demand in our core South African business. Our recently acquired businesses,
Safika Cement and Pronto Readymix, have continued to contribute positively to group results. Our new 600 000 ton per annum
cement plant in Rwanda will begin to make a meaningful contribution to our results in the second half of 2015. The delivery
of the expansion projects remains a critical focus while the execution of the business plans is now of paramount importance.
We have identified R400 million worth of sustainable profit improvement on our existing portfolio of assets.”
PPC group performance
PPC’s total cement sales volumes improved by 5% for the period under review. Group revenue increased by 9% to
R4 541 million (2014: R4 157 million) on the back of increased volumes in Zimbabwe, Botswana and Rwanda as well as
the consolidation of sales from Safika Cement and Pronto Readymix. Cement selling prices declined in South Africa and
Botswana while limited growth was recorded in other territories, however, the favourable impact of the devaluation of
the rand contributed positively to group revenue. Group revenue was further supported by a 10% growth in revenue
for the lime division. On a like-for-like basis, excluding the consolidation of Safika Cement and Pronto Readymix, group
revenue would be 1% above last year at R4 126 million (2014: R4 080 million).
Cost of sales of R3 206 million (2014: R2 793 million) was 15% higher mainly due to the consolidation of Safika
Cement and Pronto Readymix. On a like-for-like basis, excluding these acquisitions, cost of sales would be 6% above
last year. Administration and other operating expenditure increased by 15% to R554 million (2014: R480 million),
however, on a like-for-like basis, excluding the impact of acquired overheads, administration and other operating
expenditure would have reflected a decline of 1% to R447 million (2014: R450 million).
EBITDA decreased by 4% to R1 123 million (2014: R1 174 million) and operating profit, excluding the impact of
empowerment transaction IFRS 2 charges and restructuring costs, was down 11% when compared to the previous
reporting period at R789 million (2014: R884 million) largely due to the weakness in the core South African cement
business. On a like-for-like basis, excluding the impact of newly acquired businesses, EBITDA would have declined by
9% to R1 050 million (2014: R1 152 million). During the review period both group EBITDA and operating margins
contracted; recording 25% (2014: 28%) and 17% (2014: 21%) respectively.
Following an impairment assessment review, an impairment charge of R44 million was recorded. This is related to
accelerated depreciation of the existing 100 000 ton per annum cement factory in CIMERWA that will be decommissioned
as the new factory comes online (R7 million). Furthermore, goodwill of R22 million was impaired on the Pronto
Readymix transaction as well as R15 million of costs that were capitalised on the Algeria transaction, due to the expiry
of the memorandum of understanding.
Cash generated from operations amounted to R1 140 million (2014: R780 million). This year-on-year improvement
is as a result of the non-recurrence of once-off payments relating to the BBBEE interest rate swaps liability of
R113 million and restructuring costs of R64 million. Capital investment during the half year amounted to R1 008 million
(2014: R872 million) with over R600 million being spent on the new plants in Rwanda and the Democratic Republic of
the Congo (DRC). The group’s net debt position ended the half year at R6 308 million (2014: R5 198 million), with debt
to EBITDA ending below three times.
Taxation of R163 million (2014: R155 million) was favourably impacted by a R27 million prior year adjustment following
assessment of the 2013 year, bringing the effective tax rate to 36%. In the prior year, a R70 million prior year’s tax over
provision was recorded which reduced the prior year tax rate to 24%.
Headline earnings per share ended 38% lower at 60 cents per share (2014: 96 cents per share). Normalised earnings
per share of 61 cents per share were 28% lower than the prior period while earnings per share of 52 cents per share
were down 45%.
The directors have declared an interim dividend of 24 cents per share (2014: 38 cents per share), which is in line with
the company’s dividend policy range of between 1,8 and 2,5 times earnings.
Cement
PPC’s group cement revenue rose 4% to R3 752 million (2014: R3 610 million) while EBITDA fell 10% to R988 million
(2014: R1 093 million). Consequently the EBITDA margin fell to 26% from 30% the previous year.
South Africa
PPC’s South African cement sales volumes rose 4%, however if we exclude the contribution of Safika Cement, volumes
in the core business declined by 3% while selling prices reduced by 2%. The volume decline was mainly due to
poor economic growth as well as increased cement imports and local competition. Volume growth was, however,
experienced in the Limpopo and Rustenburg regions.
The core South African operations reported a 5% increase on a cement variable delivered cost of sales per ton while
fixed costs increased by 6%. Cost savings in coal, fuel and packaging were unfavourably impacted by expenditure on
maintenance, power and internal transport costs. The net impact of lower volumes and selling prices as well as rising
costs resulted in EBITDA in the core South African business declining by 17%.
International
Zimbabwe
Our Zimbabwean operations recorded volume growth of 9%; benefitting from a new marketing strategy that was
recently implemented. Despite the strong volume growth, price increases in the local market remain muted, however,
good cost control led to EBITDA rising by 4% in US dollar terms. Exports to neighbouring countries have, however,
reduced from a robust performance in the previous period as a result of exchange rate pressures and projects which
were supplied in the previous period, are now completed.
Botswana
Sales volumes in Botswana have risen by over 20% on the back of technical issues experienced by competitors as well
as increased supply to key retail clients and construction projects. Selling prices and cost of sales both reduced from the
prior period. Cost reductions as well as improved volumes resulted in margins improving by 20%.
Mozambique
Following the relocation of the Maputo office to Tete, we continue to supply cement into the southern Mozambique
market directly from South Africa while our Zimbabwe factory supplies the Tete region.
Rwanda
Local and export sales volumes improved while selling prices also rose by 3% per ton. Good cost control has led to
improved margins.
Lime, aggregates and readymix
Revenue in the lime business ended 10% higher on the back of improved burnt product sales. EBITDA has risen by 13%
to R78 million (2014: R69 million) driven by higher volumes and cost saving initiatives. Unfortunately, one of our clients
has recently applied for business rescue and as such, we have written off R14 million as a bad debt.
Despite weakness in the South African aggregates business, aggregates and readymix revenues ended at
R463 million due to the consolidation of Pronto Readymix from July 2014. Consequently, EBITDA rose to R57 million
(2014: R12 million).
Board changes
Following shareholder engagement, a reconstituted board was appointed at the annual general meeting (AGM) in
January 2015. We welcome the following directors to the board:
Ms Nicky Goldin
Mr Timothy Leaf-Wright
Mr Tito Mboweni
Mr Charles Naude
Mr Peter Nelson
Dr Daniel Ufitikirezi
Mr Darryll Castle (chief executive)
Ms Ntombi Langa-Royds and Mr Joe Shibambo retired at the AGM. We sincerely appreciate their excellent contribution
during their tenure on the board.
Following previous announcements regarding Mr Sibiya's position as chairman, shareholders should note that it is the
intention for Mr Sibiya to step down as chairman of the PPC Ltd board at the AGM in 2016. The board has already commenced
with its plans for succession.
Prospects and strategy
We have embarked on an ambitious change management programme that will realign the culture to one of delivery
and high performance as well as generating sustainable profit improvements of R400 million. The Profit Improvement
Programme (PIP) will focus on revenue optimisation, strategic cost reductions and operational efficiencies.
We continue to make good progress with our rest of Africa expansion strategy and remain confident that we will
meet our stated objective of generating 40% of revenues from outside South Africa by 2017, from our existing suite
of African projects.
Cold commissioning on the new 600 000 ton plant in Rwanda began during the first week of March 2015, with
electrical tie-ins to be completed before cement production commences early in the second half of calendar 2015.
Construction work is underway in the DRC and Zimbabwe; both projects remain on budget and on time, with
production anticipated in the latter part of next year. Detailed work to establish the capital costs and timelines for the
Ethiopia project is underway and announcements in this regard will be made in due course. It is anticipated that the
previously communicated costs and timeline will be exceeded. We continue to explore further expansion opportunities
in the rest of the African continent.
In light of the Department of Trade and Industry’s revised codes of good practice and the Mining Charter, we are
reviewing our current BBBEE structures in order to align and comply with the new codes. The Minister of Finance
recently confirmed the implementation of South Africa’s carbon tax regime which is likely to have a material impact on
the cement industry’s cost structure from January 2016. The International Trade Administration Commission initiated
the cement dumping investigation in August 2014 and imposed provisional import duties on cement imported from
Pakistan into the South African Customs Union (SACU) from 15 May 2015.
We remain optimistic that cement sales volumes will improve in our operating geographies. Growth in the South African
economy, which remains subdued, is an important foundation for our expansion strategy. We remain confident about prospects
for strong growth in the other African markets in which we operate.
On behalf of the board
BL Sibiya DJ Castle MMT Ramano
Chairman Chief executive officer Chief financial officer 18 May 2015
Dividend announcement
Notice is hereby given that an interim ordinary gross dividend of 24 cents per share has been declared payable to
ordinary shareholders in respect of the six months ended 31 March 2015. This dividend will be paid out of profits as
determined by the directors.
The local dividends tax rate is 15%. The dividends tax to be withheld by the company amounts to 3,6 cents per share,
giving a net dividend payable to shareholders of 20,4 cents per share where no exemption is applicable. The issued share
capital of the company at the declaration date comprises 605 379 648 shares and the company’s income tax reference number
is 9560015606.
The important dates pertaining to this dividend for shareholders trading on the JSE Limited are as follows:
Declaration date Monday, 18 May 2015
Last day to trade “Cum” dividend Friday, 5 June 2015
Shares trade “Ex” dividend Monday, 8 June 2015
Record date Friday, 12 June 2015
Payment date Monday, 15 June 2015
Share certificates may not be dematerialised or rematerialised between Monday, 8 June 2015 and Friday, 12 June 2015,
both dates inclusive. Transfers between the South African and Zimbabwean registers may not take place between
Monday, 8 June 2015 and Friday, 12 June 2015, both dates inclusive.
Zimbabwe
The important dates pertaining to this dividend for shareholders trading on the Zimbabwe Stock Exchange are as
follows:
Declaration date Monday, 18 May 2015
Record date Friday, 12 June 2015
Payment date, on or shortly after Monday, 15 June 2015
The register of members in Zimbabwe will be closed from Monday, 8 June 2015 to Friday, 12 June 2015, 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 (ZAR).
By order of the board
JHDLR Snyman
Group company secretary
18 May 2015
Sandton
Condensed consolidated statement of comprehensive income
Six months ended Year ended
Notes 31 March 31 March % 30 Sept
2015 2014 change 2014
Unaudited Unaudited Audited
Rm Rm Rm
Revenue 4 541 4 157 9 9 039
Cost of sales 3 206 2 793 15 6 266
Gross profit 1 335 1 364 (2) 2 773
Administration and other operating expenditure 554 480 15 1 030
Operating profit before empowerment transactions
IFRS 2 charges 781 884 (12) 1 743
Empowerment transactions IFRS 2 charges# 25 19 38
Operating profit 2 756 865 (13) 1 705
Finance costs (including fair value adjustments on
financial instruments) 3 277 231 20 467
Investment income 11 21 (48) 53
Profit before equity accounted earnings and
exceptional items 490 655 (25) 1 291
(Loss)/profit from equity accounted investments (3) 6 24
Impairments 4 (44) (10) (111)
Other exceptional adjustments 4 1 - 1
Profit before taxation 444 651 (32) 1 205
Taxation 5 163 155 5 356
Profit for the period 281 496 (43) 849
Attributable to:
Ordinary shareholders of PPC Ltd 274 494 840
Non-controlling interests 7 2 9
Other comprehensive income, net of taxation 209 79 268
Items that will be reclassified to profit or loss
upon derecognition 209 79 221
Cash flow hedges - 6 7
Translation of foreign operations 209 73 214
Items that will not be reclassified to profit or loss
upon derecognition - - 47
Revaluation of available-for-sale financial investments - - 58
Taxation on revaluation of available-for-sale financial
investments - - (11)
Total comprehensive income 490 575 (15) 1 117
EARNINGS PER SHARE (CENTS) 6
Basic 52 94 (45) 160
Diluted 51 93 (45) 158
#Comprise BBBEE, Zimbabwe indigenisation and DRC IFRS 2 charges.
Condensed consolidated statement of financial position
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Notes Rm Rm Rm
ASSETS
Non-current assets 9 802 7 446 8 938
Property, plant and equipment 8 009 6 229 7 223
Goodwill 7 249 177 268
Other intangible assets 8 774 475 681
Equity accounted investments 9 219 420 223
Other non-current assets 10 536 145 534
Deferred taxation assets 15 - 9
Current assets 2 480 2 840 2 637
Inventories 944 1 028 894
Trade and other receivables 11 1 072 1 152 1 180
Cash and cash equivalents 464 660 563
Total assets 12 282 10 286 11 575
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 12 (1 141) (1 173) (1 173)
Other reserves 941 545 733
Retained profit 2 123 2 116 2 255
Equity attributable to ordinary shareholders of PPC Ltd 1 923 1 488 1 815
Non-controlling interests 757 591 603
Total equity 2 680 2 079 2 418
Non-current liabilities 6 628 5 859 7 186
Deferred taxation liabilities 980 921 1 030
Long-term borrowings 13 5 216 4 432 5 740
Provisions 388 361 374
Other non-current liabilities 14 44 145 42
Current liabilities 2 974 2 348 1 971
Short-term borrowings 13 1 556 1 426 351
Trade and other payables and short-term provisions 15 1 418 922 1 620
Total equity and liabilities 12 282 10 286 11 575
Net asset book value per share (cents) 365 284 345
Condensed consolidated statement of cash flows
Six months ended Year ended
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Notes Rm Rm Rm
Cash flow from operating activities
Operating cash flows 1 171 1 214 2 472
Working capital movements (31) (434) 111
Cash generated from operations 1 140 780 2 583
Finance costs paid (252) (214) (426)
Investment income received 11 21 53
Taxation paid (252) (325) (499)
Cash available from operations 647 262 1 711
Dividends paid (423) (636) (880)
Net cash inflow/(outflow) from operating activities 224 (374) 831
Acquisitions of equity accounted investments - (3) (3)
Acquisitions of subsidiary companies 17 - (377) (662)
Investments in property, plant and equipment and
intangible assets 16 (1 008) (872) (2 182)
Other investing movements 9 (34) 7
Net cash outflow from investing activities (999) (1 286) (2 840)
Net borrowings raised before bond issuances 632 1 039 201
Proceeds from the issuance of bonds - 750 1 750
Purchase of shares in terms of the FSP share incentive scheme - (53) (53)
Net cash inflow from financing activities 632 1 736 1 898
Net (decrease)/increase in cash and cash equivalents (143) 76 (111)
Cash and cash equivalents at beginning of the period 563 492 492
Cash and cash equivalents acquired on acquisitions of
subsidiary companies - 84 149
Exchange rate movements on opening cash and cash equivalents 44 8 33
Cash and cash equivalents at end of the period 464 660 563
Cash earnings per share (cents)* 123 50 325
Cash conversion ratio# 1.0 0.7 1.1
* 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.
# Cash conversion ratio is calculated using cash generated from operations divided by EBITDA.
Condensed consolidated statement of changes in equity
Other reserves
Unrealised Foreign Available-
surplus on currency for-sale Equity
Stated reclassification translation financial Hedging compensation
capital of plant reserves assets reserves reserves
Rm Rm Rm Rm Rm Rm
Balance at September 2013 (audited) (1 236) 1 202 37 (7) 306
Acquisitions of subsidiary companies - - - - - -
Dividends declared - - - - - -
IFRS 2 charges - - - - - 36
Non-controlling interests’ share of foreign currency
translation reserve - - - - - -
Put option liabilities recognised on acquisition of
subsidiary company - - - - - -
Time value of money adjustments on put options - - - - - -
Total comprehensive income - - 73 - 6 -
Transfer to retained profit and reclassifications - - - - - 7
Treasury shares held in terms of the FSP share
incentive scheme (53) - - - - -
Vesting of a portion of the shares held by BBBEE 1
entities 100 - - - - (100)
Vesting of a portion of the FSP share incentive scheme
awards 16 - - - - (16)
Balance at 31 March 2014 (unaudited) (1 173) 1 275 37 (1) 233
Dividends declared - - - - - -
IFRS 2 charges - - - - - 12
Non-controlling interests’ share of foreign currency
translation reserve - - - - - -
Time value of money adjustments on put options - - - - - -
Total comprehensive income - - 141 47 1 -
Transfer to retained profit - (1) - - - (12)
Balance at September 2014 (audited) (1 173) - 416 84 - 233
Dividends declared - - - - - -
IFRS 2 charges - - - - - 36
Non-controlling interests’ share of foreign currency
translation reserve - - - - - -
Subscription for equity by non-controlling shareholder
in PPC Barnet DRC Holdings - - - - - -
Total comprehensive income - - 209 - - -
Transfer to retained profit - - - - - (5)
Vesting of a portion of the shares held by BBBEE 1
entities 9 - - - - (9)
Vesting of a portion of the FSP share incentive
scheme awards 23 - - - - (23)
Balance at March 2015 (unaudited) (1 141) - 625 84 - 232
Condensed consolidated statement of changes in equity (continued)
Equity
attributable
to ordinary Non-
Retained shareholders controlling Total
profit of PPC Ltd interests equity
Rm Rm Rm Rm
Balance at September 2013 (audited) 2 257 1 560 582 2 142
Acquisitions of subsidiary companies - - 140 140
Dividends declared (636) (636) - (636)
IFRS 2 charges - 36 - 36
Non-controlling interests’ share of foreign currency
translation reserve - - 18 18
Put option liabilities recognised on acquisition of
subsidiary company - - (137) (137)
Time value of money adjustments on put options - - (6) (6)
Total comprehensive income 494 573 2 575
Transfer to retained profit and reclassifications 1 8 (8) -
Treasury shares held in terms of the FSP share
incentive scheme - (53) - (53)
Vesting of a portion of the shares held by BBBEE 1
entities - - - -
Vesting of a portion of the FSP share incentive
scheme awards - - - -
Balance at 31 March 2014 (unaudited) 2 116 1 488 591 2 079
Dividends declared (212) (212) (32) (244)
IFRS 2 charges - 12 - 12
Non-controlling interests’ share of foreign currency
translation reserve - - 23 23
Time value of money adjustments on put options - - 6 6
Total comprehensive income 346 535 7 542
Transfer to retained profit 5 (8) 8 -
Balance at September 2014 (audited) 2 255 1 815 603 2 418
Dividends declared (411) (411) (12) (423)
IFRS 2 charges - 36 - 36
Non-controlling interests’ share of foreign currency
translation reserve - - 37 37
Subscription for equity by non-controlling shareholder
in PPC Barnet DRC Holdings - - 122 122
Total comprehensive income 274 483 7 490
Transfer to retained profit 5 - - -
Vesting of a portion of the shares held by BBBEE 1
entities - - - -
Vesting of a portion of the FSP share incentive scheme
awards - - - -
Balance at March 2015 (unaudited) 2 123 1 923 757 2 680
Segmental information
The group discloses its operating segments according to the business units which are regularly reviewed by the
group executive committee which comprise cement, lime, aggregates and readymix and other.
Group Cement* Lime
31 March 31 March 30 Sept 31 March 31 March 30 Sept 31 March 31 March 30 Sept
2015 2014 2014 2015 2014 2014 2015 2014 2014
Unaudited Unaudited Audited Unaudited Unaudited Audited Unaudited Unaudited Audited
Rm Rm Rm Rm Rm Rm Rm Rm Rm
Revenue
South Africa 3 363 3 078 6 671 2 516 2 578 5 395 430 372 792
Rest of Africa 1 288 1 097 2 432 1 236 1 032 2 315 6 25 25
4 651 4 175 9 103 3 752 3 610 7 710 436 397 817
Inter-segment revenue (110) (18) (64)
Total revenue 4 541 4 157 9 039
Operating profit before items listed below 789 884 1 759 706 839 1 595 56 46 107
Empowerment transactions IFRS 2 charges 25 19 38 25 19 38 - - -
Restructuring costs 8 - 16 8 - 5 - - 11
Operating profit 756 865 1 705 673 820 1 552 56 46 96
South Africa 520 627 1 230 434 588 1 072 56 46 96
Rest of Africa 236 238 475 239 232 480 - - -
Fair value (losses)/gains on financial
instruments (1) 1 38 4 - 40 - 1 1
Finance costs 276 232 505 219 169 384 2 2 3
Investment income 11 21 53 6 19 48 2 1 2
Profit before earnings from equity accounted
investments and exceptional items 490 655 1 291 464 670 1 256 56 46 96
Earnings from equity accounted investments (3) 6 24 (3) 6 24 - - -
Impairments and other exceptional adjustments (43) (10) (110) (22) (10) (81) - - -
Profit before taxation 444 651 1 205 439 666 1 199 56 46 96
Taxation 163 155 356 140 145 314 16 12 25
Net profit 281 496 849 299 521 885 40 34 71
Depreciation and amortisation 342 290 615 290 258 542 22 20 40
EBITDA~ 1 123 1 174 2 358 988 1 093 2 132 78 69 136
South Africa 821 903 1 790 685 821 1 569 78 69 136
Rest of Africa 302 271 568 303 272 563 - - -
EBITDA margin (%) 24.7 28.2 26.3 26.3 30.3 27.7 17.9 17.4 18.0
Assets
Non-current assets 9 802 7 446 8 938 8 870 6 990 7 991 300 314 310
Current assets 2 480 2 840 2 637 2 055 2 513 2 191 189 210 192
Total assets 12 282 10 286 11 575 10 925 9 503 10 182 489 524 502
South Africa 6 919 7 176 6 541 5 634 6 474 5 225 489 524 502
Rest of Africa 5 363 3 110 5 034 5 291 3 029 4 957 - - -
Investments in property, plant and equipment 995 809 2 119 957 757 2 025 11 46 62
Capital commitments (refer note 18) 6 145 866 3 896 6 120 861 3 860 5 5 7
Liabilities
Non-current liabilities 6 628 5 859 7 186 5 303 4 559 5 768 95 101 101
Current liabilities 2 974 2 348 1 971 2 684 2 176 1 707 78 56 48
Total liabilities 9 602 8 207 9 157 7 987 6 735 7 475 173 157 149
South Africa 7 669 6 986 7 446 6 075 5 534 5 789 173 157 149
Rest of Africa 1 933 1 221 1 711 1 912 1 201 1 686 - - -
Revenue is split between South Africa and the rest of Africa based on where the underlying goods are anticipated to be consumed or used by the customer.
No individual customer comprises more than 10% of group revenue.
* Includes head office activities.
# Includes readymix from the effective date of consolidation of Pronto, being July 2014.
^ Other comprises BBBEE trusts and trust funding SPVs.
~ Excluding BBBEE, Zimbabwe indigenisation and DRC IFRS 2 charges. In September 2014, restructuring costs were added back when EBITDA was disclosed.
This has been amended in the current reporting period and not adjusted for when disclosing EBITDA.
Segmental information (continued)
The group discloses its operating segments according to the business units which are regularly reviewed by the
group executive committee which comprise cement, lime, aggregates and readymix and other.
Aggregates and readymix# Other^
31 March 31 March 30 Sept 31 March 31 March 30 Sept
2015 2014 2014 2015 2014 2014
Unaudited Unaudited Audited Unaudited Unaudited Audited
Rm Rm Rm Rm Rm Rm
Revenue
South Africa 417 128 484 - - -
Rest of Africa 46 40 92 - - -
463 168 576 - - -
Inter-segment revenue
Total revenue
Operating profit before items listed below 27 (1) 57 - - -
Empowerment transactions IFRS 2 charges - - - - - -
Restructuring costs - - - - - -
Operating profit 27 (1) 57 - - -
South Africa 30 (7) 62 - - -
Rest of Africa (3) 6 (5) - - -
Fair value (losses)/gains on financial
instruments (5) (2) (5) - 2 2
Finance costs 3 3 8 52 58 110
Investment income 3 1 3 - - -
Profit before earnings from equity accounted
investments and exceptional items 22 (5) 47 (52) (56) (108)
Earnings from equity accounted investments - - - - - -
Impairments and other exceptional adjustments (22) - (29) 1 - -
Profit before taxation - (5) 18 (51) (56) (108)
Taxation 7 (2) 17 - - -
Net profit (7) (3) 1 (51) (56) (108)
Depreciation and amortisation 30 12 33 - - -
EBITDA~ 57 12 90 - - -
South Africa 58 13 85 - - -
Rest of Africa (1) (1) 5 - - -
EBITDA margin (%) 12.3 7.1 15.6 - - -
Assets
Non-current assets 632 142 637 - - -
Current assets 236 115 253 - 2 1
Total assets 868 257 890 - 2 1
South Africa 796 176 813 - 2 1
Rest of Africa 72 81 77 - - -
Investments in property, plant and equipment 27 6 32 - - -
Capital commitments (refer note 18) 20 - 29 - - -
Liabilities
Non-current liabilities 92 16 96 1 138 1 183 1 221
Current liabilities 120 45 143 92 71 73
Total liabilities 212 61 239 1 230 1 254 1 294
South Africa 191 41 214 1 230 1 254 1 294
Rest of Africa 21 20 25 - - -
Revenue is split between South Africa and the rest of Africa based on where the underlying goods are anticipated to be consumed or used by the customer.
No individual customer comprises more than 10% of group revenue.
* Includes head office activities.
# Includes readymix from the effective date of consolidation of Pronto, being July 2014.
^ Other comprises BBBEE trusts and trust funding SPVs.
~ Excluding BBBEE, Zimbabwe indigenisation and DRC IFRS 2 charges. In September 2014, restructuring costs were added back when EBITDA was disclosed.
This has been amended in the current reporting period and not adjusted for when disclosing EBITDA.
Notes to the condensed consolidated interim results
1. Basis of preparation
The condensed consolidated interim financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS), International Accounting Standards (IAS) 34 Interim Financial Reporting,
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements
as issued by the Financial Reporting Standards Council, comply with the Listings Requirements of the JSE Limited
and the requirements of the Companies Act of South Africa. The group’s external auditors have not reviewed or
reported on these results.
These condensed consolidated interim financial statements have been prepared under the supervision of MMT Ramano CA(SA),
chief financial officer, and were approved by the board of directors on 18 May 2015 who take full responsibility for the
preparation of the condensed consolidated interim financial results.
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 2014, except for the following revised accounting standards and
interpretations that were adopted during the period, and which did not have a material impact on the reported results:
- IFRIC 21 Levies
- IAS 19 (Amendment) Defined Benefit Plans: Employee Contribution
- IAS 32 (Amendment) Offsetting Financial Assets and Financial Liabilities
- IAS 36 (Amendment) Recoverable Amount Disclosures for Non-financial Assets
- IAS 39 (Amendment) Novation of Derivatives and Continuation of Hedge Accounting
- IASB Improvements to IFRS 2010 - 2012 (Amendment to IFRS 2, IFRS 3, IFRS 13, IAS 16, IAS 38, IAS 24, IFRS 8)
- IASB Improvements to IFRS 2011 - 2013 (Amendment to IFRS 1, IFRS 3, IFRS 13, IAS 40)
- Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
2. Operating profit
Included in operating profit:
Amortisation of intangible assets 49 30 72
Depreciation 293 260 543
IFRS 2 charges:
BBBEE IFRS 2 charges 18 19 37
DRC IFRS 2 charges 6 - -
Cash settled IFRS 2 (reversal)/charges (5) 2 (5)
Equity settled IFRS 2 charges 11 17 10
Zimbabwe indigenisation IFRS 2 charges 1 - 1
Restructuring costs 8 - 16
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
3. Finance costs (including fair value adjustments on financial instruments)
Bank and other short-term borrowings 22 49 73
Bonds 95 39 108
Long-term loans 121 82 203
238 170 384
Capitalised to plant and equipment and intangibles (39) (11) (36)
Finance costs before BBBEE funding and time value of money adjustments 199 159 348
BBBEE funding transaction 53 59 110
Dividends on redeemable preference shares 22 27 48
Long-term borrowings 31 32 62
Time value of money adjustments on rehabilitation and decommissioning
provisions and put option liabilities 24 14 47
Finance costs 276 232 505
Fair value adjustments on financial instruments 1 (1) (38)
277 231 467
South Africa 273 237 465
Rest of Africa 4 (6) 2
4. Impairments and other exceptional adjustments
Gain on remeasurement of equity stake in Pronto (refer note 17) - - 1
Impairment of goodwill (refer note 7) (22) - (65)
Impairment of property, plant and equipment (22) (10) (46)
Reversal of impairment of financial assets 1 - -
(43) (10) (110)
As the current memorandum of understanding (MOU) relating to the Hodna Cement project (Algeria) has expired and
discussions are continuing to extend the MOU, it is deemed appropriate that the costs capitalised to property,
plant and equipment of R15 million be impaired.
In the current period, accelerated depreciation of R7 million was recorded against property, plant and equipment
of the old plant ahead of the commissioning of the new plant at CIMERWA.
In September 2014, the carrying value of the assets at PPC Aggregate Quarries of Botswana (Pty) Limited and
CIMERWA Limited were assessed for potential impairment. Following these assessments, R17 million and R29 million
was recorded against property, plant and equipment at PPC Aggregate Quarries of Botswana and CIMERWA respectively.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
% % %
5. Taxation
Taxation rate reconciliation
A reconciliation of the standard South African
normal taxation rate is shown below:
Total taxation as a percentage of profit before
taxation (excluding earnings from equity
accounted investments) 36.4 23.8 30.1
Prior year taxation impact 6.1 11.0 5.9
Taxation as a percentage of profit before taxation,
excluding prior year taxation adjustments 42.5 34.8 36.0
Empowerment transactions and IFRS 2 charges not tax
deductible (2.1) (0.8) (0.8)
Finance costs on BBBEE funding transactions not tax
deductible (4.0) (2.5) (2.4)
Foreign taxation rate differential - - 0.9
Impairments and other non-deductible costs (6.4) (0.6) (4.0)
Withholding taxation (2.0) (2.9) (1.7)
South African normal taxation rate 28.0 28.0 28.0
Cents Cents Cents
6. Earnings and headline earnings
Earnings per share
Basic 52 94 160
Diluted 51 93 158
Basic (normalised)^ 61 86 175
Diluted (normalised)^ 60 85 173
Headline earnings per share
Basic 60 96 179
Diluted 59 95 176
Basic (normalised)^ 61 85 175
Determination of headline earnings per share
Earnings per share 52 94 160
Adjusted for:
Impairment of goodwill 4 - 12
Impairment of property, plant and equipment 4 2 9
Taxation on impairment of property, plant and equipment - - (2)
Headline earnings per share 60 96 179
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
6. Earnings and headline earnings continued
Normalised earnings
Net profit 281 496 849
Normalisation adjustments^ 46 (55) 79
Normalised net profit 327 441 928
Attributable to:
Shareholders of PPC Ltd 320 439 909
Non-controlling interests 7 2 19
327 441 928
Headline earnings
Net profit 281 496 849
Gain on remeasurement of equity stake in Pronto - - (1)
Impairment of property, plant and equipment 22 10 46
Taxation on impairment of property, plant and equipment (2) (2) (12)
Impairment of goodwill 22 - 65
Headline earnings 323 504 947
Attributable to:
Shareholders of PPC Ltd 316 502 927
Non-controlling interests 7 2 20
323 504 947
^ Normalised earnings adjusts the reported earnings for the effects of empowerment transaction IFRS 2 charges,
restructuring costs, impairments and prior year taxation adjustments. For the weighted average number of shares
used in the calculation, refer note 12. The calculation of normalised earnings for September 2014 has been
updated since published on SENS on 18 November 2014 but was adjusted in the annual financial statements.
The difference between earnings and diluted earnings per share is attributable to shares held under the
forfeitable share incentive scheme that have not vested, together with the dilution impact of the group’s various
empowerment transactions.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
7. Goodwill
Balance at beginning of the period 268 101 101
Acquisitions of subsidiary companies - 75 227
Impairment losses recognised (refer note 4) (22) - (65)
Translation differences 3 1 5
Balance at end of the period 249 177 268
Goodwill, net of impairments, is allocated
to the following subsidiary companies:
CIMERWA Limited 44 102 41
Safika Cement Holdings Pty Limited 78 75 78
Pronto Holdings Pty Limited 127 - 149
249 177 268
Following the goodwill impairment assessment review, the recoverable amount of Pronto (September 2014: CIMERWA)
to which goodwill had been allocated on acquisition, was calculated to be lower than the carrying amount, resulting
in an impairment of R22 million (March 2014: Rnil, September 2014: R65 million).
8. Other intangible assets
Balance at beginning of the period 681 232 232
Acquisitions of subsidiary companies^ - 236 428
Additions 14 28 63
Amortisation (49) (30) (72)
Transfers and other movements# 115 - 19
Translation differences 13 9 11
Balance at end of the period 774 475 681
Comprising:
Right of use of mineral assets 169 46 54
ERP development and other software 137 100 132
Brand and trademarks 345 330 359
Customer relationships - contractual and 123 - 132
non-contractual
Off market lease agreements - - 4
774 476 681
^ Intangible assets were recognised on the acquisitions of Pronto and Safika Cement (refer note 17) in the prior
year and are amortised over a maximum period not exceeding 15 years from the date of acquisition. The group
does not have any indefinite life intangible assets, other than goodwill.
# As communicated in the September 2014 results, the company was still finalising the split between property,
plant and equipment (PPE) and intangible assets on the contribution made by the Barnet Group, non-controlling shareholder,
into PPC Barnet DRC Holdings. This split has now been finalised and R115 million has been transferred from PPE to other
intangible assets, and is included under right of use of mineral assets.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
9. Equity accounted investments
Investments at cost* 133 308 309
Loans advanced 45 49 46
Share of retained profit 41 63 83
Acquisition of subsidiary company^ - - (215)
219 420 223
* In February 2014, PPC acquired a further equity stake in Habesha Cement Share Company (Habesha), for a
purchase consideration of R3 million, increasing PPC’s shareholding in the company to 31.6% (March 2014: 31.6%, September 2014: 31.6%).
For further details on Habesha, refer note 19.
^ In 2014, PPC obtained control over Pronto following the acquisition of the remaining 50% it did not own in the company
for R280 million. Refer note 17 for further details.
10. Other non-current assets
Advance payments for plant and equipment^ 325 - 322
Loans advanced - - 3
Unlisted collective investment~ 116 110 114
Unlisted investment at fair value@ 95 35 95
536 145 534
^ In terms of the construction agreements with the suppliers of the new cement plants in Rwanda and DRC, a portion of the
contract prices are required to be paid in advance of the plant construction and are secured by advance payment bonds.
~ Comprises an investment by the PPC Environmental Trust in local unit trusts. These investments are held to fund PPC’s South African
environmental obligations.
@ PPC Ltd holds a 6.75% (March 2014: 6.75%, September 2014: 6.75%) shareholding in Ciments du Bourbon, incorporated in Reunion. The
fair value of the investment was calculated using a dividend yield valuation methodology, using comparable company dividend yields and
applied to forecast dividends. The forecast dividends are based on financial forecasts approved by management. The movement in fair
value of Rnil million (March 2014: (R2 million), September 2014: R58 million) has been credited against other comprehensive income.
11. Trade and other receivables
Trade receivables 1 013 983 1 064
Impairment of trade receivables (54) (21) (30)
Net trade receivables 959 962 1 034
Other financial receivables 65 69 57
Prepayments 48 121 61
Taxation prepaid - - 28
1 072 1 152 1 180
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Shares (000) Shares (000) Shares (000)
12. Stated capital
Number of shares and weighted average number of shares
Number of shares
Total shares in issue at beginning of the period 605 380 605 380 605 380
Adjustments for shares treated as treasury shares:
Shares held by consolidated participants of the second BBBEE transaction& (37 382) (39 350) (37 382)
Shares held by consolidated BBBEE trusts and trust funding SPVs* (34 477) (34 764) (34 765)
Shares held by consolidated Porthold Trust (Private) Limited@ (1 285) (1 285) (1 285)
Shares purchased in terms of the FSP share incentive scheme~ (5 328) (5 866) (5 866)
Total shares in issue (net of treasury shares) 526 908 524 115 526 082
Weighted average number of shares, used for:
Earnings and headline earnings per share 527 189 525 694 526 180
Dilutive earnings and headline earnings per share 532 236 530 076 532 755
Cash earnings per share 527 189 524 115 526 180
Shares are weighted for the period in which they are entitled to participate
in the net profit of the group.
Rm Rm Rm
Stated capital
Balance at beginning of the period (1 173) (1 236) (1 236)
Shares purchased in terms of the FSP share incentive scheme treated
as treasury shares~ - (53) (53)
Vesting of shares held by certain BBBEE 1 entities* 9 100 100
Vesting of shares on a portion of the shares held in terms of the
FSP share incentive scheme~ 23 16 16
Balance at end of the period (1 141) (1 173) (1 173)
& Shares issued in terms of PPC’s second BBBEE transaction which was facilitated by means of a notional vendor funding
(NVF) mechanism resulting in these shares only participating in 20% of the dividends declared by PPC during the NVF
period, ending 30 September 2019. With the exception of the Bafati Investment Trust, entities participating in this
transaction are consolidated into the PPC group during the transaction term.
* Certain of the BBBEE trusts and trust funding SPVs from PPC’s first BBBEE transaction are consolidated, and as a
result, shares owned by these entities are carried as treasury shares on consolidation. During the period, 287 361
(March 2014: 3 202 770, September 2014: 3 202 770) shares vested to beneficiaries and are no longer treated as treasury shares.
@ Shares owned by a Zimbabwean employee trust company treated as treasury shares.
~ In terms of the forfeitable share incentive scheme, 5 328 219 (March 2014: 5 865 851, September 2014: 5 865 851) shares
are held in total for participants of this long-term incentive scheme. The shares are treated as treasury shares during
the various vesting periods of the awards. During the period, 537 632 (March 2014: 619 457, September 2014: 619 457) shares
vested and are no longer treated as treasury shares.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
13. Borrowings
Bonds$ 1 748 1 396 2 395
Long-term loan* 1 520 1 519 1 520
Project funding 810 334 605
US dollar-denominated - Rwanda# 418 214 359
Rwandan franc-denominated - Rwanda@ 255 120 246
US dollar-denominated - Zimbabwe^ 137 - -
Long-term borrowings before BBBEE funding transaction 4 078 3 249 4 520
BBBEE funding transaction 1 138 1 183 1 220
Preference shares~ 444 516 529
Long-term borrowings% 694 667 691
Long-term borrowings 5 216 4 432 5 740
Short-term borrowings and short-term portion of
long-term borrowings 1 556 1 426 351
Total borrowings 6 772 5 858 6 091
Maturity profile of borrowings:
One year 1 556 1 426 351
Two years 2 925 649 763
Three years 142 3 036 2 706
Four years 892 - 61
Five years and more 1 257 747 2 210
6 772 5 858 6 091
$ Comprises four unsecured bonds, issued under the company’s R6 billion Domestic Medium Term Note programme, and are recognised
net of capitalised transaction costs, with details as follows:
Bond number, term and interest rate Issue date
PPC 001: three years; three-month JIBAR plus 1.26% March 2013 650 650 650
PPC 002: five years; three-month JIBAR plus 1.5% December 2013 750 750 750
PPC 003: five years; three-month JIBAR plus 1.48% July 2014 750 - 750
PPC 004: seven years; 9.86% July 2014 250 - 250
2 400 1 400 2 400
Less: Transaction costs capitalised 2 4 5
2 398 1 396 2 395
Less: Short-term portion 650 - -
1 748 1 396 2 395
* 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.
# Denominated in US dollar, bearing interest at 650 basis points above LIBOR and is repayable over a ten year period ending
2024. The loans are secured against CIMERWA’s land and buildings.
@ Denominated in Rwandan franc, interest at a fixed rate of 16% p.a. and is repayable over a ten year period ending 2024. The
loans are secured against CIMERWA’s land and buildings.
^ The loan bears interest at a six month US dollar LIBOR plus 700 bps, interest payable bi-annually, commencing December 2014.
First capital repayment will be in December 2016; thereafter bi-annual repayments in equal instalments over five years. The
loan is secured against PPC Zimbabwe’s land and buildings.
~ Comprises redeemable A preference shares bearing semi-annual dividends, with variable interest rates averaging 85% of prime,
with compulsory annual redemptions until December 2016, redeemable preference shares bearing semi-annual dividends, with
variable interest rates averaging 85% of prime and fixed rates of 9.37% p.a. and compulsory annual redemptions ending
December 2016 and B preference shares bearing interest at a rate of 78% of prime; capital and dividends are payable by
December 2016.
% B loans bearing interest at a rate of 285 basis points above JIBAR, with interest and capital repayable in December 2016.
In terms of IFRS, the BBBEE funding has been consolidated as PPC has provided guarantees for funding that has an outstanding
balance of R1 138 million (March 2014: R1 124 million, September 2014: R1 291 million).
The group is compliant with its covenants for the measurement period ended March 2015.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
14. Other non-current liabilities
Cash-settled share-based payment liability 11 24 18
Put option liabilities^ 151 143 145
162 167 163
Less: Short-term portion of other non-current liabilities (refer note 15) (118) (22) (121)
44 145 42
^ With the purchase of 69.3% equity stake in Safika Cement (refer note 17), PPC granted non-controlling shareholders individual
put options, with different exercise dates, for the sale of their remaining shares in the company to PPC. As these put options
are deemed to be contracts to purchase the group’s own equity instruments, it gives rise to a financial liability for the present
value of the estimated redemption amount. One of the put options is anticipated to be exercised in the current financial year and
the liability of R108 million (March 2014: Rnil, September 2014: R105 million) has therefore been classified as a current liability,
with the balance of the put options anticipated to be exercised after the fifth anniversary of the transaction. The put option value
is based on the company’s forecast EBITDA applying an earnings multiple dependent on the level of EBITDA achieved less net debt.
Forecast EBITDA is based on financial forecasts approved by management, with pricing and margins similar to those currently being
achieved by the business unit while selling prices and costs are forecast to increase at local inflation projections and extrapolated
using local GDP growth rates.
15. Trade and other payables and short-term provisions
Cash-settled share-based payment liability (short-term portion) (refer note 14) 10 22 16
Derivative financial instruments 2 1 1
Equity contribution for future non-controlling interest in wholly owned subsidiary~ - - 115
Other financial payables 355 59 296
Put option liability (refer note 14) 108 - 105
Retentions held for plant and equipment* 136 55 81
Trade payables and accruals 525 623 664
Trade and other financial payables 1 136 760 1 278
Taxation payable 125 49 142
Payroll accruals 157 113 194
Restructuring provisions - - 6
1 418 922 1 620
~ Includeds the value of the land and mining rights transferred by a future non-controlling shareholder for equity in the DRC companies.
Certain conditions were not met in 2014 and the shares in PPC Barnet DRC Holdings, the holding company for the DRC group of companies,
were only issued to the non-controlling shareholder in the current period, resulting in the amount recorded as a liability in 2014 being
transferred to non-controlling interest post the issuance of the shares.
* Retentions held on the construction of the cement plants in Rwanda and DRC. These retentions will be paid to the contractor once the
plant achieves guaranteed performance targets.
The composition of trade and other payables and short-term provisions for March 2014 has been reclassified since publication in 2014.
This follows a review of the basis of classification of the various components and now aligns to September 2014 and March 2015. This
reclassification has also impacted the fair values as disclosed in note 20.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
16. Investment in property, plant and equipment and intangible assets
Cement 984 820 2 088
Lime 11 46 62
Aggregates and readymix 13 6 32
1 008 872 2 182
South Africa 233 250 479
Rest of Africa 775 622 1 703
2014
Pronto Safika
Holdings Cement
17. Acquisitions of subsidiary companies
Fair value of assets and liabilities acquired at date of acquisition
Property, plant and equipment 162 63
Goodwill 149 78
Other intangible assets 192 236
Cash and cash equivalents 65 84
Current assets 89 199
Financial assets 1 -
Long-term borrowings (10) -
Long-term provisions and deferred taxation (78) (72)
Current liabilities (75) (71)
Non-controlling interests - (140)
Total consideration 495 377
Less fair value of the previously held equity stake (215) -
Consideration payable to external entities 280 377
Pronto Holdings Pty Limited (Pronto)
During July 2014, PPC acquired the remaining 50% equity stake in Pronto making it a wholly owned
subsidiary. Pronto is a prominent Gauteng-based readymix and fly ash supplier, with nine batching plants.
This acquisition provided PPC additional ways to increase its cement distribution channel while also
expanding its range of complementary products available to the building and construction industry. In
accordance with the requirements of IFRS on step-acquisitions, the previously held equity accounted
investment was re-valued resulting in an adjustment gain of R1 million which was recognised in 2014.
The fair values presented at the time were provisional and are now final, with no changes made to the
provisional numbers.
Safika Cement Holdings Pty Limited (Safika Cement)
During December 2013, all conditions to the transaction were filled and PPC acquired a 69.3% equity stake
in Safika Cement for R377 million and was consolidated from the effective date of the transaction. This
transaction further enhanced PPC´s South African footprint through Safika Cement´s five blending facilities
and one milling operation that produce blended 32.5N cement under three brands: IDM Best Build, Castle and
the Spar Build-It house brand.
Aggregate Quarries of Botswana
In October 2011 all conditions precedent with regard to the transaction to acquire three aggregate quarries
and related assets in Botswana were met. The transaction value amounted to R52 million and was to be funded
over a two-year period. The final payment of R5 million was paid during the 2014 financial year.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Rm Rm Rm
18. Commitments
Contracted capital commitments 3 781 525 2 786
Approved capital commitments 2 364 341 1 110
Capital commitments 6 145 866 3 896
Equity commitment - Habesha Cement Share Company (refer note 19) 158 - -
Operating lease commitments 148 127 138
6 451 993 4 034
Capital commitments:
South Africa 2 088 284 242
Rest of Africa 4 057 582 3 654
6 145 866 3 896
Capital commitments are anticipated to be incurred:
- within one year 2 861 716 2 246
- between one and two years 2 592 150 1 572
- greater than two years 692 - 78
6 145 866 3 896
Commitments for capital expenditure are stated in current values which, together with expected price
escalations, will be financed from surplus cash generated and borrowing facilities available to the group.
The increase in commitments follows the approvals of the construction of DRC cement plant and Zimbabwe cement
mill expansion project in the prior year and Slurry upgrade project which was approved post-2014 year-end.
Project funding of US$168 million and US$75 million for the DRC and Zimbabwe projects respectively has been
secured.
19. Rest of Africa expansion
Ethiopia
During November 2014, PPC advised of the conclusion of discussions to acquire the Industrial Development
Corporation’s 20% stake in Ethiopian based Habesha Cement Share Company (Habesha) for a purchase
consideration of US$13 million (with the commitment reflected in note 18). PPC initially acquired 27%
shareholding in Habesha in July 2012, and has subsequently increased its shareholding to 31%. This acquisition
will increase PPC’s stake in Habesha to 51% while the balance of the shareholding in Habesha is held by over
16 000 local shareholders, and will be finalised after regulatory approvals have been obtained.
Habesha has begun the construction of a 1.4 million ton per annum facility, 35km north-west from the bustling
city of Addis Ababa. Project costs for this factory are approximately US$135 million and commissioning of
the plant is anticipated in 2016.
DRC
As reported previously in November 2014, the International Finance Corporation (IFC) signed a subscription
agreement to acquire a 10% stake in PPC Barnet DRC Holdings, which completed the DRC shareholders’ requirements
and commitment from IFC. The shares are yet to be issued but are anticipated to be issued before year-end. Post
the issuance of these shares, PPC will hold 69%, Barnet group 21% and IFC 10% of the shares in PPC Barnet DRC.
31 March 31 March 30 Sept
2015 2014 2014
Unaudited Unaudited Audited
Level* Rm Rm Rm
20. Fair values of financial assets and liabilities
The financial assets and liabilities carried at fair value
are classified into three categories as reflected below:
Financial assets
Available-for-sale
Unlisted investments at fair value (refer note 10) 3 95 37 95
Loans and receivables
Loans advanced 2 - 4 3
Loans to equity accounted companies 2 45 49 46
Trade and other financial receivables 2 1 024 1 031 1 091
Cash and cash equivalents 1 464 660 563
At fair value through profit or loss
Unlisted collective investments at fair value (held-for-trading) 1 116 110 114
Total financial assets 1 744 1 891 1 912
Level 1* 580 770 677
Level 2* 1 069 1 084 1 140
Level 3* 95 37 95
Financial liabilities
At amortised cost
Long-term borrowings 2 5 388 4 510 5 769
Short-term borrowings 1 1 556 1 426 351
Trade and other financial payables 2 1 016 737 1 156
At fair value through profit and loss
Cash-settled share-based payment liability 2 11 24 18
Put option liabilities (refer note 14) 3 151 143 145
Derivatives
Derivative instruments - current (cash flow hedge) 2 2 1 1
Total financial liabilities 8 124 6 841 7 440
Level 1* 1 556 1 426 351
Level 2* 6 417 5 217 6 944
Level 3* 151 143 145
* Level 1 - financial assets and liabilities that are valued according to unadjusted market prices for similar
assets and liabilities. Market prices in this instance are readily available and the price represents
regularly occurring transactions which have been concluded on an arm’s length transaction.
* Level 2 - financial assets and liabilities are valued using observable inputs, other than the market prices
noted in the level 1 methodology, and make reference to pricing of similar assets and liabilities in an
active market or by utilising observable prices and market-related data.
* Level 3 - financial assets and liabilities that are valued using unobservable data, and requires management
judgement in determining the fair value.
There were no transfers between level 1 and level 2 fair value measurements and no transfers into or out of level
3 fair value measurements during the period ended March 2015.
Methods and assumptions used by the group in determining fair values
The estimated fair value of financial instruments is determined, at discrete points in time, by reference to the
mid-price in an active market wherever possible. Where no such active market exists for the particular asset or liability,
the group uses valuation techniques to arrive at fair value, including the use of prices obtained in recent arm’s length
transactions, discounted cash flow analysis, dividend yield and other valuation techniques commonly used by market
participants.
The fair value of cash and cash equivalents, trade and other financial receivables and trade and other financial payables
approximate their respective carrying amounts of these financial instruments because of the short period to maturity of
these instruments.
21. Events after the reporting date
There are no events that occurred after the reporting date that may have a material impact on the group’s reported financial
position at 31 March 2015.
Administration
Directors
Executive: DJ Castle (chief executive officer), MMT Ramano (chief financial officer)
Non-executive: BL Sibiya (chairman), N Goldin, TJ Leaf-Wright, MP Malungani, T Mboweni, SK Mhlarhi,
B Modise, T Moyo*, CH Naude, PG Nelson, TDA Ross, D Ufitikirezi**
*Zimbabwean **Rwandan
Registered office
148 Katherine Street, Sandton, South Africa
(PO Box 787416, Sandton 2146, South Africa)
Transfer secretaries
Link Market Services SA (Pty) Limited
13th Floor, Rennies House, 19 Ameshoff Street, Braamfontein, South Africa
(PO Box 4844, Johannesburg 2000, South Africa)
Transfer secretaries Zimbabwe
Corpserve (Pvt) Limited
4th Floor, Intermarket Centre, Corner 1st Street/Kwame Nkrumah Avenue, Harare Zimbabwe
(PO Box 2208, Harare, Zimbabwe)
Sponsor
Merrill Lynch South Africa (Pty) Limited
Disclaimer
This document including, without limitation, those statements concerning the demand outlook, PPC’s 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
negligence arising in connection with a forward-looking statement. This document is not intended to contain any profit forecasts
or profit estimates. The information published in this report has not been audited.
These results and other information is available on the PPC website: www.ppc.co.za
Date: 19/05/2015 07:11:00 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.
