PPC, Africa’s biggest maker of cementitious products, said it expected sales for the 12 months to March 31, 2022, to increase by only 4-8 percent year-on-year, while double-digit volume growth in Zimbabwe and Rwanda was expected.
However, management said in an operational update yesterday that low sales increases in South Africa and Botswana cement was because volumes had normalised from a high base the year before.
If PPC’s cement sales were compared with two years ago to the 12 month period to March 31, 2020, they were expected to increase by 11 percent to 15 percent, the group said.
The group’s materials businesses also experienced a recovery in demand, with year-on-year growth in sales volumes.
Cement sales volumes in South Africa and Botswana were expected to increase by zero to 3 percent for the 12 months, this after the prior comparable period benefited from strong retail demand from increased spending on home improvements.
Relative to the pe-Covid twelve months to March 31, 2020, cement sales in South Africa and Botswana were expected to increase by 5-9 percent.
PPC South Africa and Botswana cement sales were benefiting from demand from rural and informal markets, albeit at a “normalised” rate following the post Covid-19 lockdown spike in demand.
Industrial construction activity in the inland area showed pockets of demand growth from the construction of distribution centres and an increase in mining activity.
There was low single-digit growth in cement sales in coastal regions, supported by a recovery in industrial construction demand. However, cement sales in the coastal region were still below the twelve months ended March 31, 2020.
PPC said it had yet to experience an uplift in cement sales from the government’s designation of the use of locally produced cement on government projects.
Except for some limited road construction and rehabilitation activity, there had been no large infrastructure projects, the group said.
PPC implemented price increases to offset input cost inflation with realised selling prices increasing by 4-7 percent.
Cement imports, mainly from Vietnam, increased by 11 percent and currently exceeds pre-Covid-19 levels.
Gross debt declined to R1.2 billion at February 28, 2022, from R1.7bn on September 30, 2021, due to the focus on cash generation and proceeds from the sale of PPC Lime and the Botswana aggregates business.
PPC’s share price fell 2.1 percent to R4.20 yesterday afternoon, but remained well up from R1.68 a year ago.
BUSINESS REPORT ONLINE