JSE-listed cement manufacturer PPC expects to report basic earnings per share (EPS) of between 18c and 21c apiece for the six months ended September 30, which is between 35% and 45% lower than the restated EPS of 32c apiece reported for the six months ended September 30, 2019.
The company’s earnings before interest, taxes, depreciation and amortisation for the six months under review will, however, likely be between 12% to 17% higher than the R868-million reported for the prior period.
PPC explains that the decline in EPS is mainly owing to non-cash-related items.
The company is reviewing its prior interim and yearly financials backward from March 31, 2020, which has resulted in a restatement of the results for the six months ended September 30, 2019.
The combined impact of these adjustments on earnings and headline earnings per share for the period in question is an increase of 34c and 28c apiece, respectively.
Net asset value as at September 30, 2019, is increased by R301-million to R7.7-billion.
After a difficult start to PPC’s 2021 financial year from April, owing to Covid-19-related trade restrictions imposed by authorities in most of the jurisdictions in which it operates, the company has experienced a strong recovery in cement sales that has contributed to improved operating performance.
PPC also continues to make good progress on its restructuring and refinancing project, with the objective of implementing a sustainable capital structure and improving the investment prospects of the company.
In South Africa, PPC has signed facilities agreements with its two primary South African lenders, who will provide term loan and long-term revolving credit facilities of R1.85-billion and short-term general banking facilities of R625-million.
PPC is also finalising documentation relating to the provision of security, including a security pool arrangement comprising immovable property, debtors and inventory.
Moreover, PPC has signed revised terms with its third South African lender for a working capital facility of R175-million, which has now removed the requirement of being part of the security pool arrangement.
In the Democratic Republic of Congo (DRC), PPC has signed a formal standstill agreement with its lenders.
PPC continues to actively engage with its DRC lenders, who have now appointed financial and legal advisers, on a detailed restructuring plan. PPC is targeting agreeing the basis of the restructuring plan with the DRC lenders before the end of this calendar year.
Following a number of unsolicited approaches regarding PPC Lime, PPC has decided to accelerate the sale of PPC Lime and appointed financial advisers to manage a structured sales process of the business. PPC is targeting deal certainty by the end of the first quarter of 2021.
The company will publish its interim results on December 8.