By Oliver Kazunga
Cement producer Pretoria Portland Cement says revenues from its local unit, PPC Zimbabwe, have declined by 20 percent to R1 447 million in the year ended March 31, 2019.
In a statement accompanying its financial results for the period under review, PPC attributed the decline in revenue at its local operation to a weaker cement market and shortage of clinker, a major raw material in the production of cement.
“Revenue declined by 20 percent to R1 447 million (March 2018: R1 813 million) against the backdrop of a weaker cement market, clinker shortages and a depreciation in the functional currency in the second half of the financial year,” said the cement manufacturer.
It said the published results for PPC Zimbabwe for the first half of the 2019 financial year were based on an exchange rate of RTGS $1: US$1.
The reported results of PPC Zimbabwe being consolidated in PPC group from October 1, 2018 to March 2019, were based on the commercial exchange rate of RTGS $3,5: US$1.
“The successful implementation of our route-to-market strategy has enabled PPC to offset some of these headwinds, with volumes declining by five percent.
“PPC Zimbabwe is operationally self-sufficient and continues to drive local procurement and exports to reduce forex requirements,” said the cement manufacturing group.
“PPC Zimbabwe continues to service its debt obligations with in-country cash resources.
“Legacy debt has been registered with the Reserve Bank of Zimbabwe and will be settled on a 1:1 basis.”
It said management has implemented contingency measures to mitigate the impact of the liquidity challenges.
PPC also has operations across the African continent in countries such as Rwanda, Democratic Republic of Congo (DRC), and Ethiopia.
During the period under review, the group recorded a two percent increase in revenue to R2 826 (March 2018: R2 762 million) on volume growth of 10 percent.
“Volumes were supported by ramp up of DRC and positive contribution from Rwanda post the debottlenecking in the first half of the financial year.
“The difficult trading conditions in Zimbabwe had an adverse impact on overall volume growth and price realisation,” said the manufacturing group. The Chronicle