PPC reports significant financial growth, with EBITDA up over 20%

PPC’s share price surged 3.6% on Monday morning to R5.16 after it reported a “marked improvement” in its financial performance for the four months to July 31, 2025.

The JSE-listed cement and aggregates maker for markets in South Africa, Botswana, and Zimbabwe said in an update for the four months that their two-year-old “Awaken the Giant” turnaround strategy was gaining traction. This had resulted in further growth and margin expansion, on top of the improvement across key metrics achieved in the 2025 financial year.

Their strategy, being implemented in a weak macro-economic environment in South Africa, focuses on increasing long-term leadership and competitiveness, through enhanced profitability and cash flow.

In the four-months, group earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by more than 20% over the comparable period a year before, and the EBITDA margin grew by over 2 percentage points, PPC’s directors stated.

Sales volumes in South Africa and Botswana increased by 2% due to stronger retail sales and sales of clinker to PPC Zimbabwe.

The four-month EBITDA for South Africa and Botswana cement continued to see notable improvement, with the EBITDA margin significantly increasing from 10.3% to 17.7%.

“The timing of certain plant shutdowns contributed positively. As this normalises in the six months ending September 30, 2025, the South Africa and Botswana cement margin is expected to remain at around 17%,” PPC’s directors said.

In Zimbabwe, cement sales volumes increased by 22%, largely due to strong consumer demand and the positive impact of a 30% tariff on imported cement introduced in May 2025.

In the first two months of the current period, PPC Zimbabwe implemented an extended shutdown at its Colleen Bawn plant. This was planned as part of a three-year plant performance improvement plan to better position PPC Zimbabwe to produce higher own-clinker volumes for the production of cement, thereby supplying the growing demand in the market.

The costs of the shutdown, along with higher consumption of imported clinker, impacted EBITDA and the EBITDA margin during the first three months of the current period.

PPC Zimbabwe's EBITDA margin reduced to 15.3% from 29%. After the shutdown, the monthly EBITDA margin returned to the level achieved in the comparable period. Cash generation remained strong, notwithstanding the temporarily lower EBITDA margins. Dividends of $6 million were declared, compared with nil in the comparable period.

Dividends totalling $14m were also declared subsequent to the current period, resulting in total dividends declared for the first half of the 2026 financial year of $20m versus $4m last year.

The sale of the Arlington property for $30m was on track but had not been accounted for in the current period.

Group revenue increased by 4%, driven by growth in both South Africa and Botswana cement, as well as Zimbabwe. Group EBITDA continued to increase over the comparable period.

“As margins increase considerably in Zimbabwe and reduce marginally in South Africa over August and September, group EBITDA margins are expected to continue to increase from the current period level,” the group stated.

“The RK3 project remains on track and gearing projections remain unchanged,” PPC's directors said.

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