UPDATE 1-South African cement firm PPC's profits boosted by cost cuts

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UPDATE 1-South African cement firm PPC's profits boosted by cost cuts
Credit: © Reuters.

(Adds details, CEO quote)

JOHANNESBURG, June 27 (Reuters) - South African cement company PPC PPCJ.J reported a 33% increase in annual earnings on Thursday, buoyed by a reduction of group overhead costs and other saving initiatives.

PPC, which operates in six African countries, said its headline earnings per share (EPS) for the year ended March 2019 increased to 20 cents from 15 cents a year earlier.

The company had initially scheduled to release its results on Wednesday, but they were delayed by its auditors who were still assessing fair value adjustments of the firm's Zimbabwean financial assets.

Headline EPS is the main profit measure in South Africa that strips out certain one-off items.

Group overheads fell 19%, or 260 million rand ($18 million). The cost savings saw earnings before interest, tax, depreciation, and amortisation rise 4% to 1.9 billion rand, of which the Democratic Republic of Congo contributed 108 million.

"PPC has been able to produce a solid set of results, by delivering on its strategic priorities. This has resulted in significant cost savings," said outgoing Chief Executive Johan Claassen.

PPC announced the appointment of LafargeHolcim LHN.S veteran Roland van Wiljnen as its new CEO on Wednesday. company's revenue rose 1% to 10.4 billion rand as growth in cement volumes was held back by weak demand from consumers and the construction industry in South Africa, and as the cement market in Zimbabwe struggled too.

South African construction firms are battling a weak economy and a pullback in infrastructure spending by the government and private sector.

Volumes in Rwanda rose 5% while Ethiopia, which is still in the ramp-up phase, achieved volumes of more than 500,000 tonnes.

($1 = 14.1500 rand)

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