Wrap Text
Audited Consolidated Annual Financial Statements for the Year Ended 31 March 2025 and Cash Dividend Declaration
PPC Ltd
(Incorporated in the Republic of South Africa)
(Company registration number: 1892/000667/06)
JSE ISIN: ZAE000170049
JSE code: PPC
ZSE code: PPC
(PPC or the company or the group)
SHORT-FORM ANNOUNCEMENT
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
AND CASH DIVIDEND DECLARATION
SNAPSHOT OF PERFORMANCE FROM CONTINUING OPERATIONS
Consolidated group
- Step change in margins and cash flow due to delivery on the cost improvement initiatives
in the turnaround strategy
- Revenue decreased 1,9% to R9 871 million (FY24:R10 058 million)
- EBITDA increased 28% to R1 593 million (FY24:R1 242 million)
- EBITDA margin increased 13,8% points to 16,1% (FY24:12,3%)
- Free cash inflow before financing activities increased to R1 049 million (FY24:R260 million*)
- EPS of 32 cents (FY24:6 cents) HEPS of 40 cents (FY24:19 cents)
- SA & Botswana group recommence dividends and a record PPC Zimbabwe dividend
- Ordinary dividend of 17,6 cents per share (FY24:of 13,7 cents per share declared)
* Excluding discontinued operations and proceeds from the sale of CIMERWA.
INDIVIDUAL BUSINESSES
SA and Botswana group
- Turnaround execution delivering strong results and margin expansion despite the muted
market
- Cement volumes decreased 2,3%
- Revenue increased 0,6% to R6 749 million (FY24:R6 712 million)
- EBITDA increased 31% to R744 million (FY24:R567 million)
- EBITDA margin increased 2,6% points to 11,0% (FY24:8,4%)
- A dividend of R30 million (FY24:Rnil)
- Stronger balance sheet with reduced debt at a lower cost
PPC Zimbabwe
- Potential started to be unlocked delivering record results
- Cement volumes decreased 5,5%
- Revenue decreased 6,7% to R3 122 million (FY24:R3 346 million)
- EBITDA increased 26% to R849 million (FY24:R675 million)
- EBITDA margins increased 7,0% points to 27,2% (FY24:20,2%)
- Cash dividends paid of US$13,0 million, with PPC's share at
R234 million (FY24:US$11,0 million with PPC's share at R203 million)
MATIAS CARDARELLI, CEO, SAID:
"The past year at PPC has been one of rebuilding our foundations,changing the strategy,action and delivery.
Tough decisions were taken in order to simplify our structure,secure highly skilled and experienced talent
and more importantly,engage with our people to disseminate the new organisational culture. Implementing
phase one of our "Awaken the Giant" strategic turnaround plan,has resulted in a step change in PPC's
FY25 margins,profitability and cash generation.
Over the past year,we focused on our core competencies turning previous gaps into opportunities.
The cost discipline and accountability culture,implemented across the organisation,significantly improved
business performance,and profitability.
The FY25 results are even more remarkable,considering that the markets where we operate didn't have
noteworthy growth.Consistent with my previous communications,we remain focused on things within our
control - delivering on our plans and doing so at an increased pace.
Despite the flat sales,the strong business performance was anchored on the improvement of the cement
business fundamentals. We are becoming more competitive and better prepared to deliver an enhanced value
proposition to our customers. Besides the positive impact of cost discipline,our contribution margin
increased across all segments of our business. We were able to offset inflationary costs with early
operational improvements,from logistics optimisation to a better product mix,lower clinker factor and
improved sales sourcing.
With disciplined execution on our strategic priorities,PPC achieved significant improvements across all
key financial metrics,from EBITDA growth of 28%,to EBITDA margin expansion of 3,8p.p. and free cash flow
of 1 049 million (+306% over FY24). These improved results must make us all proud at PPC.
In parallel with the execution of our turnaround plan,we have implemented some of the defined strategic
steps that will support PPC's future competitiveness,including the approval for the construction of a new
integrated plant in the Western Cape.
The PPC board and I remain in full alignment on the journey to return PPC to profitability leadership.
While there is much work left to do,delivering ahead of plan boosts my confidence in the ability of the
team to execute the PPC growth strategy."
GROUP PERFORMANCE - CONTINUING OPERATIONS
PPC delivered significantly improved profitability and cash flow generation for the twelve months to
31 March 2025 (the current year) compared to the twelve months to 31 March 2024 (the prior year),
despite continued pressure on cement volumes in both South Africa and Zimbabwe, as well as in the readymix
and ash businesses.
Group revenue decreased 1,9% to R9 871 million (FY24: R10 058 million) mainly due to a 6,7% reduction in
Zimbabwe's revenue as PPC's SA & Botswana group revenue was relatively stable, increasing by 0,6%.
Due to the implementation of initiatives pursuant to the turnaround strategy, the main driver of the group's
improved performance was the reduction in cost of sales, which decreased 5,8% to R7 922 million
(FY24: R8 409 million), combined with the reduction in administration and other operating expenditure of
8,2% to R950 million (FY24: R1 035 million). These cost improvements were the primary driver of the 59%
increase in trading profit to R982 million (FY24: R619 million).
Group EBITDA increased by 28% to R1 593 million (FY24: R1 242 million) and EBITDA margins expanded
encouragingly. Group EBITDA margin increased by 3,8 percentage points to 16.1% (FY24: 12.3%) accelerating
the group towards its medium-term target of more than 20%.
Depreciation reduced by R49 million in the current year, R25 million of which was due to an assessment of
an increase in the useful lives of assets.
Impairments totalling R181 million were taken in the current year (FY24: R267 million). All the impairments
taken in the current year were specific assets impairments. No cash generating units needed to be impaired.
Of the R181 million, R155 million relates to the De Hoek mine and the Riebeeck factory due to the decision
to build a state-of-the-art integrated plant in the Western Cape (RK3). Mining of limestone at De Hoek will
largely cease from FY26 as a direct result of the increased mining at the better quality Riebeeck quarry,
and the existing raw milling lines at Riebeeck will cease to operate as RK3 is constructed. The prior year
impairment related mainly to the mothballing of the swing kiln lines at Slurry and Dwaalboom as well as the
Jupiter milling plant. All these assets,however,remain readily available should they be needed due to
increased volumes.
Finance costs decreased 19,1% to R106 million (FY24: R131 million) mainly due to lower long-term borrowing
levels in South Africa compared to the prior year combined with improved pricing of these facilities when
they were renegotiated in September 2024. Investment income increased to R63 million (FY24: R42 million)
on higher cash balances compared to the prior year, mainly due to improved cash generation as well as the
retention of 33% (some R250 million) of the net proceeds on the sale of CIMERWA in the prior year.
Profit before tax increased meaningfully to R774 million (FY24: R233 million) and profit after tax was
R466 million (FY24: R88 million).
Higher profits resulted in an increase in taxation to R308 million (FY24: R145 million) although the
effective tax rate for the current year is 40%, it has significantly improved from the prior year rate of
62%. The cash tax rate of the group, excluding a once-off item, is at 32,6%,in line with internal targets
but higher than the statutory rate. This higher rate is mainly due to withholding taxes on dividends
received, non-deductibility of costs in PPC Limited and non-deductibility of certain in-country costs in
Zimbabwe. There was a once-off negative impact on the effective rate of 3,5% due to the conclusion of a
SARS audit on PPC Cement SA for FY20 and FY21. The balance of the increase in the actual effective tax rate
is largely due to not raising deferred tax assets for certain entities in the group with assessed losses.
Earnings per share increased to 32 cents (FY24: 6 cents) in line with the significant increase in profit
for the year as there were only minor movements to the number of shares in issue during the year.
Headline earnings per share increased to 40 cents (FY24: 19 cents), mainly due to the adjustments for the
after tax impairment charges.
Cash generation and working capital management was defined as a key focus area. The group's net cash
inflow before financing activities increased by R789 million to R1 049 million
(FY24: R260 million, excluding discontinued operations) mainly due to the improved operating cash flows
(R359 million) and reduced inventory levels (R368 million).
Disciplined capital allocation continued in the current year with capital expenditure totalling
R373 million (FY24: R400 million) for the year.
Following the conclusion of the sale of PPC's investment in CIMERWA (Rwanda), a special dividend totalling
R521 million, being 66% of the net proceeds received, was declared and settled during the current year.
An ordinary cash dividend totalling R213 million, declared in June 2024, was also settled during the
current year. The net cash outlay relating to both the special and ordinary dividends amounted to R703 million.
Group gross debt declined to R502 million (FY24: R779 million) and the group improved its net cash positive
position to R370 million (FY24: R78 million) due to the lower gross debt number and a marginally stronger
cash position of R872 million (FY24: R857 million). The main drivers of the movement in net cash from
31 March 2024 are the improvement in net cash inflows before financing activities to R1 049 million
(FY24: R260 million from operating continuing operations) and the net dividend paid of R703 million (FY24: Rnil).
Of the R872 million group cash holdings, R720 million is attributable to the SA & Botswana group.
The SA & Botswana group has total debt of R502 million and financial leases of R137 million leaving the
overall SA & Botswana group is in a net cash position. The SA & Botswana group leverage objective remains
at or below net debt to EBITDA of 1,3 - 1,5 times.
SA AND BOTSWANA CEMENT
Cement sales volumes in South Africa and Botswana for the current year were down 2,3% when compared to the
prior year. In the South African market, the competition across both the industrial and construction segments
and the retail segment intensified during FY25. Nevertheless, the cement sales in the second half of the
year grew period-on-period but a full year recovery was hampered by the heavy rains affecting the fourth
quarter of the year. Botswana sales experienced a significant drop in the last quarter of the year due to
the impact that rains had on the rail logistics that supply that market.
Notwithstanding declining volumes, average selling price increases resulted in cement revenues increasing
year-on-year. However, the price increases implemented in June 2024 and February 2025 did not hold completely
due to competitor pricing. Overall, including clinker sales outside the group, the SA & Botswana group
revenue increased by 2,3% to R5 839 million (FY24: R5 709 million).
Despite input cost inflation and continued high electricity tariff increases during the year, total costs
including depreciation decreased 1,8%, driven by cost discipline and the benefits of the turnaround actions,
namely in-housing logistics, optimising the source of cement sales, fuel mix optimisation and increased use
of extenders in cement.
In the current financial year, the methodology used by PPC Group Services (Group Services) to charge
management fees to the other group companies was changed. In addition, with effect from 1 October 2024,
all the assets and employees of Group Services were taken over by PPC Cement SA. It is therefore more
representative in the current financial year to assess cost reduction in the SA and Botswana Cement segment,
including admin and other operating expenses of the PPC Ltd and other segment. On this basis, total costs
reduced by 2,8%.
EBITDA increased 22% to R837 million (FY24: R684 million) as margins expanded by 2,3 percentage points to
13,6% (FY24: 11,3%). In the first half of the financial year, EBITDA increased by 10% compared to first half
of the prior year. However, in the second half of the current financial year, EBITDA increased by 40% on
the comparable period partially due to a weaker comparable period but also as cost control was embedded
and savings started to realise due to operational efficiencies.
Strict capital allocation criteria contained overall capital expenditure to R200 million (FY24: R263 million).
During the current year, PPC Cement SA refinanced its core borrowing facilities on behalf of the
SA & Botswana group to re-establish an appropriate repayment profile and to secure improved pricing.
Gross debt of the SA & Botswana group reduced by R277 million to R502 million (FY24: R779 million) and net
leverage levels remain well below the target range of 1,3 to 1,5 times the last twelve months EBITDA of the
SA & Botswana group. Post year-end these facilities were further enhanced as disclosed in some detail in
note 34 - Events after the reporting date.
AGGREGATES, READYMIX AND ASH
Overall, revenue for the materials division decreased by 9,3% to R910 million (FY24: R1 003 million),
as volumes in the readymix and ash businesses reduced by 21,2% and 25,8% respectively.
Aggregates volumes increased by 17% compared to the prior year. The segmental EBITDA amounted to
R24 million (FY24: R43 million). This represents an improvement in operational results given that the prior
year EBITDA was enhanced by a positive once-off non-cash item of R55 million. In the current year, the second
half was significantly weaker than the first half although total annual EBITDA remains positive due to a
cost savings focus.
ZIMBABWE
PPC's operation in Zimbabwe reported a 5,5% decrease in sales volumes compared to the prior year.
In H2 FY24, imports in the country normalised and volumes in H2 FY25 recovered to almost the comparable
period levels.
While revenue for the current year decreased by 6,7% to R3 122 million (FY24: R3 346 million) profitability
improved significantly due to improvements across all cost lines - variable, fixed and administrative
costs. Against a background of volumes reducing by 5,5%, cost of sales reduced by 14,4% (R392 million) and
admin and other operating expenses reduced by R46 million. A combination of lower volumes sold and
improved in-country clinker production resulted in a lower volume of purchased clinker further improving
margins.
EBITDA increased to a record R849 million (FY24: 675 million) and EBITDA margin increased 7,0% points
to 27,2% (FY24: 20,2%).
Zimbabwe remains debt-free and had unrestricted cash holdings at 31 March 2025 of R118 million up
from R40 million at 31 March 2024. Some 94% of PPC Zimbabwe's cash is held in hard currencies.
Zimbabwe declared and paid US$13 million in dividends during the current year (FY24: US$11 million).
Capital expenditure increased to R147 million in the current year (FY24: R105 million). The driver
of the increased spend was maintenance expenditure at the Colleen Bawn integrated plant due to two
kiln stoppages in the current year, mainly to replace mill liners, compared to one short stop in the
prior year given the extended kiln shutdown in FY23.
DIVIDEND
The board approved an amendment to the distribution policy in June 2024, which has the effect of
calculating a distribution in two distinct parts being:
- a distribution in an amount that would result in the target leverage range for the SA and Botswana
group being net debt at or below 1,3x - 1,5x the SA and Botswana EBITDA, before dividends from
Zimbabwe; plus
- a distribution of an amount up to the gross dividend received by PPC from Zimbabwe.
The SA & Botswana group reported strong cash generation in the current period, including receiving
record dividends from PPC Zimbabwe. At 31 March 2025, the SA & Botswana group is net cash positive.
The board considered the five-year budgets it approved in February 2025, which included the material
capital expenditure commitment for the new integrated plant in the Western Cape (RK3). Taking all
the variables into consideration, the board has approved the continuation of a cash dividend based
on a 12-month forward-looking gearing level of 1,0 x the SA and Botswana EBITDA, excluding dividends
from Zimbabwe. The board also approved the distribution of the gross dividend received by PPC Ltd
from PPC Zimbabwe as an ordinary dividend. The board is comfortable that sufficient headroom is
maintained on the SA and Botswana facilities after taking into account the committed RK3 capital
expenditure.
Accordingly, an ordinary dividend of 17,6 cents per share has been declared, resulting in a gross
cash outlay of R274 million (FY24: ordinary dividend of R213 million). This is broken down as follows:
- a dividend of 1,9 cents per share (R30 million) from the SA and Botswana group; plus
- a dividend of 15,7 cents per share (R244 million) being the dividends received from Zimbabwe.
CASH DIVIDEND
Shareholders are advised that, based on the above, the board resolved on 6 June 2025 to declare a
gross cash dividend for the year ended 31 March 2025 of R274 million. (FY24: R213 million).
This equates to 17,6 cents per share for each of the shares in issue, subject to the applicable
tax levied in terms of the Income Tax Act (Act number 58 of 1962), as amended (dividend withholding tax).
The cash dividend has been declared from retained earnings. The dividend withholding tax is 20% and
a net cash dividend of 14,08 cents per share will be paid to those shareholders who are not exempt
from dividend withholding tax.
In accordance with the provisions of Strate, the electronic settlement and custody system used by
the JSE Limited, the relevant dates for the cash dividend are as follows:
Last day to trade "cum cash dividend" Tuesday, 24 June 2025
Shares commence trading "ex cash dividend" Wednesday, 25 June 2025
Record date Friday, 27 June 2025
Payment date Monday, 30 June 2025
Share certificates may not be dematerialised between Wednesday, 25 June and Friday, 27 June 2025,
both days inclusive.
Payments for certificated shareholders will be transferred electronically to their bank accounts on
the payment date. Shareholders who hold dematerialised shares will have their accounts at their CSDP
or stockbroker credited on Monday, 30 June 2025.
Taking into account the dividends received by the subsidiary that repurchased PPC Ltd shares in FY24,
the net cash outlay is R264 million.
The company's income tax reference number is 9460015606. The company has 1,553,764,624 shares in
issue as at the date of the declaration of the cash dividend.
In compliance with the Companies Act, the directors confirm and have resolved that the company will
satisfy the solvency and liquidity tests immediately after the payment of the cash dividend.
STRATEGIC UPDATE
As explained previously, the "Awaken the Giant" strategy includes the addressing and fixing of
identified gaps, the turnaround plan itself and the continued strategic focus on value accretive
opportunities. Together, these are fundamental to our goal of improving competitiveness and ensuring
sustainable growth.
Addressing and fixing the gaps identified was the initial priority and is well advanced. While this
challenge was considerable, the sense of urgency to change the organisational core and refocus our
people has been tremendously impactful. The specific initiatives to close the gaps included
appointing key strategic expertise, simplifying the previous complex structure, the realignment of
the corporate culture and rebuilding data quality and reliability. After months of development,
detailed management information, specifically pertaining to costing and revenue generation, is
now available for decision making. These cultural changes require ongoing energy and focus to remain
entrenched and are key to the effective implementation of the rest of the turnaround strategy.
The turnaround plan itself is centred on eight focus areas, which are grouped into four key performance
areas namely: the operations and supply chain functions, the commercial area, a "less is more"
approach and finally a cost discipline mindset. The current year's results delivered a step change
ahead of expectations, and are mainly driven by those initiatives that could be implemented relatively
quickly. These are within the "cost discipline mindset" and "less is more" key performance areas, and
the early stages of the operational improvements. While progress has been made with insourcing logistics
and has yielded some benefits in the current year, incremental change will now come from the longer
lead time initiatives which include a new commercial division, continued logistics changes and the
delivery of operational efficiencies through the plant performance improvement plan. Although there
is an execution challenge in delivering these plans, we have the discipline, as well as a committed
team, to deliver the goals and objectives.
Finally, in line with PPC's continued strategic focus on value accretive opportunities, the development
of a best-in-class integrated cement plant in the Western Cape was announced on 16 January 2025.
This strategic initiative will secure PPC's cost competitiveness and low carbon cement leadership in
the years ahead. The material reduction in variable costs due to the advanced technology being introduced,
and lower fixed costs, as well as efficiencies stemming from a single site operation, will ensure the
plant is far more value accretive, when compared to our existing plants in the Western Cape.
Importantly, this will be achieved without relying on market growth. The real benefit of this project
is expected to start materialising in FY28. We have also intensified our decarbonisation plan,
implementing a series of renewable energy projects including embedded solar, wheeling solar, wind
power and battery storage.
The cement industry landscape is changing in terms of market players, global and local competitors and
expansion strategies. One thing that is common is the increased competition from new plants and advanced
technology. This will change the market dynamics and the existing producer's position in the
medium-term. PPC's competitiveness strategy is built to better position PPC in an evolving market.
It is a comprehensive strategy designed to enable short-term value growth, while the foundations for
long-term sustainable value creation are built.
OUTLOOK
PPC's view of the macro-economic environment remains positive. We believe that there will be steady
and slow improvements in the environment in the coming years. However, PPC's long-term sustainability
does not rely on an improved overall economic environment. Our focus will continue, as demonstrated in
the FY25 results recovery, to be on unlocking internal value. Ultimately, our competitiveness strategy
will position PPC even better once infrastructure projects begin to materialise.
The PPC group remains committed to building a successful local cement industry. This means accountability
to ensure that South African consumers receive quality products. Constructive dialogue, and more importantly,
action from producers and public regulators is needed to safeguard the industry and public safety.
During the year under review, PPC's strategy was defined and implementation started. We have set a
new direction for sustainable growth and value creation for the short, medium and long term. Underpinning
our strategy are clear financial metrics, namely, consistent growth in the EBITDA margin and return
on invested capital (ROIC). FY25 was initially "year zero" of our turnaround strategy, but the combined
effect of closing the gaps and accelerating the turnaround has delivered substantial results ahead of
schedule. Notwithstanding the significant margin and cash flow improvements in the current year,
opportunities remain to unlock additional value. Incremental improvements are anticipated in the
financial years FY26 and FY27 from the turnaround efforts.
While these will include further cost savings, the longer lead time changes to:
- the commercial function, focused on maximising contribution margin;
- the operations and supply chain functions, especially in relation to logistics and the plant
performance improvement plan,
will be the main drivers of further financial improvements.
The next step change in financial performance is envisaged in FY28 after the new integrated plant in
the Western Cape (RK3) becomes operational. Supported by a strong balance sheet, the construction of
RK3,entailing a spend of R3 billion over two years, will commence in FY26.
Chair Chief executive officer Chief financial officer
PJ Moleketi SM Cardarelli B Berlin
9 June 2025
Dunkeld
SHORT-FORM ANNOUNCEMENT
This short-form announcement of the audited consolidated annual financial statements for the
year ended 31 March 2025 (2025 AFS) is extracted from the financial information in the 2025 AFS. This short-form
announcement is the responsibility of the board of directors of PPC. The information in this short-form announcement
has been extracted from audited information but is not itself audited. Any investment decisions by
investors and/ shareholders should be based on a consideration of the 2025 AFS, as a whole,
as published on SENS and the issuer's website as follows:
PPC's' website:
https://www.ppc.africa/investor-centre/reports/
and JSE's website:
https://senspdf.jse.co.za/documents/2025/jse/isse/PPC/FY2025.pdf
Audit opinion
The 2025 AFS were audited by PwC, who expressed an unmodified audit opinion in terms of the International Standards on
Auditing. A copy of the auditor's report on the 2025 AFS is available on the following link:
https://www.ppc.africa/investors-relations/reports/
The auditor's report does not necessarily report on all of the information contained in this announcement, including the outlook.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement they
should obtain a copy of the auditor's report together with the accompanying financial information from PPC's website or
registered office.
Copies of the 2025 AFS and the auditors unmodified audit opinion thereon are also
available for inspection at the company's registered office (by appointment) and may be requested from
the Company Secretary Kevin Ross at (Kevin.Ross@ppc.co.za) at no charge, during office hours.
A live and recorded video webcast of the results presentation will be held today at 09:00 am and can be accessed
via this link: https://www.corpcam.com/PPC09062025.
Registered office: First Floor, 5 Parks Boulevard, Oxford Parks, Dunkeld, Johannesburg, 2196, South Africa
(PO Box 787416, Sandton, 2146, South Africa)
DIRECTORS: PJ Moleketi (chair), SM Cardarelli* (CEO), B Berlin (CFO), N Gobodo, BM Hansen**, K Maphisa,
NL Mkhondo, CH Naude, MR Thompson,
* Argentinian **Danish
Company secretary: KR Ross
Sponsor: Questco Corporate Advisory (Pty) Ltd
Date: 09-06-2025 07:05:00
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