JSE-listed PPC expects to report lower earnings for the financial year ended March 31, when compared with the pro forma financial results for the 12 months ended March 31, 2016.
The cement maker, which changed its financial year-end from September to March and adjusted its reporting to align with this, expected basic earnings per share (BEPS) and headline earnings per share (HEPS) to be between 85% and 95% lower year-on-year.
BEPS are projected to fall by between 6c and 18c apiece in the 2017 financial year, from the 117c reported in the prior period, while HEPS is likely to decline by 5c to 16c compared with the 107c achieved in 2016.
On a normalised basis, including an increase in the weighted average number of shares following the rights issue and conclusion of part of the black economic empowerment transaction, BEPS and HEPS are expected be between 25% and 35%, or 43c to 50c, lower than the year before.
Group earnings before interest, taxes, depreciation and amortisation are projected to contract by 10% to 15%, while net profit attributable to PPC shareholders is expected to decline by 85% to 95%.
PPC attributed the decline in profitability to higher financing costs for the R2-billion liquidity and guarantee facility raised in June 2016, as well as a weaker trading environment in the South African and Botswana businesses.
Profitability was further impacted on by a stronger rand:dollar exchange rate negatively impacting Zimbabwe’s contribution in rand terms; the devaluation of certain local currencies, in particular in the Democratic Republic of the Congo and Rwanda, which resulted in the revaluation of losses; and the one-off profit made last year on the sale of noncore assets, besides others.
PPC will release its final results on June 7.