PPC shares drop on lower HEPS forecast, says mulls AfriSam offer
The share price of cement producer PPC fell by as much as 8.6% on Monday on the news that it expects its headline earnings per share (HEPS) for the six months to end March 31, to be as much as 45% lower than in the comparable period the year before.
The company, which also said it was considering the merits of a merger proposal presented to it by fellow construction materials producer AfriSam in December, reported that its HEPS were likely to be between 53c and 72c – between 25% and 45% lower than in the first half of the prior financial year.
“Notwithstanding a weaker trading environment, the main contributors to the decline were a one-off tax credit in the prior reporting year and an increase in finance costs in the current year,” explained PPC.
Meanwhile, the cement producer said it was finalising a transaction with South Africa’s Industrial Development Corporation to increase its stake in Habesha Cement Company, in Ethiopia, to 51%. Habesha was building a 1.4-million-tonne-a-year facility, at a cost of $135-million, that would be commissioned in 2016.
Further, civil and mechanical construction had been completed at a 600 000 t/y cement plant in Rwanda, with only the electrical installation still to be completed. Production would start in the second half of this year.
PPC would release its interim results on May 19.
The company’s share price fell to R21.65 on Monday, down 8.6% on Friday’s close of R23.69. By 15:50, its shares were trading at R22.58 – a 4.69% drop on Friday’s close.
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