Construction materials supplier PPC's revenue for the nine months ended December 31, 2017, improved on that of the prior comparable period, with interim CEO Johan Claassen noting on Friday that the company continued to make good progress in terms of its deliverables.
However, PPC noted that the lack of large infrastructure projects continued to hamper cement volume growth in South Africa. It estimated that growth in overall cement demand had declined by 3% to 4% in South Africa.
An effective overall selling price increase of 2% was realised for the nine months, when compared to the prior period.
PPC implemented a further price increase of 2% to 5% in January.
A volume decline of between 1% and 2% was realised on a year-to-date basis. This is an improvement from the 1% volume decline reported at the half-year. Total imports increased by 23% compared with the same period last year, admittedly off a low base. Import volumes into the Western Cape, saw a smaller percentage increase.
In Botswana, the market remains muted.
In the rest of Africa, the robust growth has been maintained, particularly in Rwanda.
"Our Zimbabwe business has increased volumes significantly compared with the same time last year. In the Democratic Republic of Congo (DRC), we have managed to ramp-up market share, although the market remains a significant challenge," it said.
The group's gross and net debt positions in December improved further when compared with September 2017. Group capital expenditure had also significantly reduced when compared with the same period last year, and remained within the guidance provided at the group's interim results.
Group liquidity has benefited from the recently announced, two-year capital moratorium negotiated with funders in the DRC.
"Engagement with our engineering, procurement and construction contractor regarding a possible equity holding is ongoing. We are in the advanced stages of negotiating terms around the refinancing and restructuring of the South African debt maturing in June. We envisage this to be concluded by March," the company highlighted.
In the Western Cape, PPC implemented measures to mitigate the impact of the ongoing drought and has employed alternatives from an operational perspective to ensure continuity of supply. From the demand side, it was working with local government, as construction is viewed as a priority economic sector.
Rwanda grew volumes by between 20% to 30% during the period and pricing remained relatively stable.
PPC Zimbabwe continued to exceed expectations, with sales volumes growing by 30% to 40% compared with the prior comparable period, supported by the retail segment.
In the DRC, monthly sales have tracked progressively better since September 2017. While the trading environment has remained competitive, with muted growth, it has succeeded in increasing its market share further towards the end of the period to between 25% to 30%.
In Ethiopia, the provisional acceptance certificate was completed at the end of December 2017.