PPC Zimbabwe’s cement volumes grew by more than 5 percent in the six months to September 2020, supported by ongoing infrastructure projects.
The second quarter of the period under review, which ran from July to September was the most buoyant as sales volumes grew between 35 percent to 40 percent.
The positive sales momentum has continued into October and November, albeit at a normalised rate, according to parent company PPC Limited, which is headquartered in South Africa.
In a statement accompanying its results for the six months to September 2020, PPC Limited said revenue at its Zimbabwe unit increased by 60 percent to R797 million up from R497 million prior year comparative.
Cement pricing played a part in this revenue growth after adjustments to account for the increase in inflation and the devaluation of the local currency.
Realised selling prices in US$ increased by 23 percent.
EBITDA improved by 62 percent to R326 million up from R201 million prior year comparative.
EBITDA margins improved to 40,9 percent, versus 40,4 percent in September 2019.
The Zimbabwe-based cement market continues to meet its debt obligations in the country while remaining financially self-sufficient and recently declared a dividend to its shareholders of US$6,6 million, of which PPC Limited is entitled to US$4,7 million.
The excellent performance at PPC Zimbabwe is in line with what competitors and related companies are reporting improved performance.
Fellow cement maker — Lafarge chairman Kumbirai Katsande, said the easing of lockdown restrictions enhanced demand for products and the business recorded solid gross profit margins exceeding targets on the back of cost containment measures.
“The operating environment showed improvement influenced by easing of the Covid-19 lockdown restrictions.
“As business activity progressively continued to gain momentum into Q3, the demand for cement consequently outstripped supply causing considerable supply backlog,” he said.
Sales volumes closed the quarter 7 percent above the same period last year driven by recovery in the individual home builder market.
Demand for cement in the construction sector jumped 34 percent ahead of the previous quarter following the reopening of the economy after lockdown.
Turnall Holdings Limited also indicated increased demand for its products during the same quarter, thanks to easing of lockdown restrictions.
The group’s sales volumes for the quarter were 11 percent above the same period last year and 81 percent above the previous quarter, which was adversely affected by the pandemic.
The same can be said of brick-making firm Willdale, whose sales volumes jumped 49 percent above the same quarter prior year, bringing year to date volumes to 12 percent above prior year.