JSE-listed cement producer PPC says it has delivered a second consecutive year of strong turnaround-driven performance for the 12 months ended March 31, with a step-change in results across all key financial metrics.

For the financial year, the group earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 31% to about R2.1-billion, while the Ebitda margin expanded materially by 4.2 percentage points year-on-year to 20.3%.

Earnings a share for this financial year increased by 75% to 56c, in line with the significant increase in profit for the year.

This follows the first two years of the implementation of PPC’s Awaken the Giant turnaround strategy.

The company reported that, over the two-year period, its Ebitda increased by 62% from R1.2-billion in financial year 2024 to R2.1-billion for financial year 2026.

The company also reported an eight-percentage point expansion achieved in the Ebitda margin from 12.3% in financial year 2024 to 20.3% in this financial year.

“The Awaken the Giant turnaround strategy is delivering and there is more to come,” said CEO Matias Cardarelli during the company’s financial results presentation on June 8.

PPC said it delivered materially improved profitability and cash flow generation over financial year 2026 compared with the prior financial year. South Africa cement was the main driver of the results expansion, while Zimbabwe registered a great performance in the second half of the year.

The strong performance led to a dividend declared in respect of this financial year amounting to R469-million, a 72% increase on the prior period.

“The change in PPC has not been driven by market tailwinds or chasing volumes. It has been driven by strategic clarity and relentless execution.

“It has been driven by putting the right people in the right roles, by resetting targets, by building reliable data and by leveraging off the fundamentals of cement business,” said Cardarelli.

He noted, in a media release, that this performance is significantly ahead of expectations and has positioned PPC for its next step change, anticipated in the 2028 financial year, following the conclusion of the construction of the new state-of-the-art integrated cement plant in the Western Cape.

RESULTS

PPC has reported a 3.9% year-on-year increase in group revenue to R10.26-billion, essentially owing to a 14.3% increase in Zimbabwe’s revenue, with PPC’s South Africa and Botswana group revenue marginally down by 0.4%.

Cement sales volumes in South Africa and Botswana, including clinker sales to Zimbabwe, were up 1.3% when compared to the prior year. In South Africa, volumes remained stable in the context of muted demand.

The company says this reinforces the need for a focus on both value accretive sales and a structurally lower cost base. This drove measurable progress for a second consecutive year.

In South Africa, Ebitda increased by 43% to R1.2-billion and Ebitda margin increased by 5.5 percentage points to 19.1%.

PPC Zimbabwe reported an 18% year-on-year increase in sales volumes, reflecting the benefit of its national footprint and turnaround actions in a growing demand market.

The Zimbabwean operations’ Ebitda increased by 19% to $56-million in the period with the Ebitda margin having lowered to 26.9%. In the second half of the financial year, the Ebitda margin recovered and reached 30.9%.

The continued execution of the turnaround strategy drove a second step-change in operational leverage with the group’s cost of sales contained to a 2% increase at R8.07-billion.

This was the main driver of the trading profit improvement of 50% to R1.47-billion.

This followed a 59% increase in financial year 2025 from the R619-million in financial year 2024, demonstrating the compound impact of the group’s two-year turnaround.

Cash generation remains a clear strength of the business and a core pillar of PPC’s value creation strategy.

The group’s net cash inflow before financing activities, adjusted for the new cement plant being built in the Western Cape (RK3), increased by 23% year-on-year to R1.3-billion.

STRATEGIC UPDATE, OUTLOOK

Through disciplined execution, PPC said it has structurally improved its margin profile and will continue creating significant operating leverage, remaining cautiously optimistic on a recovery of the South African operating environment in the near term.

PPC posits that it is “exceptionally well positioned” to continue delivering internal value and is ready to convert incremental volumes into higher earnings and returns when market conditions improve.

In Zimbabwe, the operating environment is anticipated to remain sound, supporting

steady and sustainable growth.

The company explained that the internal value unlock is being achieved through the disciplined execution of PPC’s turnaround pillars – competitiveness, cost and capital discipline, and strategic value-accretive projects.

These include the RK3 project, as well as an anticipated new integrated plant, in Zimbabwe.

During the presentation, Cardarelli described the RK3 plant as being the company’s most significant project. He explained that, in the 2027 financial year, the company is entering a critical phase of plant construction, keeping the project on time and on budget, while maintaining a safe delivery.

“It is clear we have delivered meaningful progress, but what is equally clear is the scale of the opportunity ahead, and that is what creates a real sense of excitement and focus for the next phase,” he said.

Cardarelli noted that the company’s Awaken the Giant strategy remains solid.

He described the 2027 financial year as a “pivotal consolidation year” that includes consolidation of the turnaround process and capitalising on the effect of actions already implemented while preparing for the next step change in financial year 2028.

“We are confident for financial year 2027, but our focus will be on delivering and executing the plans for financial year 2028 when there will be the next marked change for PPC,” he said.

“It is an exciting year for the South African operation,” he added.

Cardarelli noted that financial year 2028 is the year in which the company will complete the construction of a new plant, positioning PPC with the two most advanced plants in the country – RK3 and SK9 in slurry – complemented by a modern and competitive plant in Durban.

He said the project remains on schedule and within the approved budget.

Additionally, he said PPC’s project governance, cost control and reporting structures remain robust and effective.

“Overall, the RK3 project is progressing and we remain confident in our ability to deliver this critical investment on time and within budget. In South Africa, we expect financial year 2027 to be a year of consolidation underpinned by broadly unchanged market conditions.”

Moreover, Cardarelli said the industry has been having productive engagement with the government about key aspects in the sector, namely the damp import of clinker and cement in the country, the carbon tax equalisation on imported cement and clinker and the enforcement of the cement quality standards in the country.

“These are critical topics for the industry and jobs in South Africa.

“We believe the moment for appropriate regulations to create a fair competitive landscape has finally come. We expect that some of the measures will take place in a short period of time, levelling the playing field for local production with imports and blenders,” he said.

“With a healthy balance sheet, disciplined capital allocation and high return projects such as RK3 ahead of us, the pathway to sustained earnings growth, margin expansion and improved returns is clear. The momentum is real and we are all positioned to capture the meaningful upside that lies ahead,” he added.