Building materials company Sephaku Holdings’ (SepHold’s) Sephaku Cement (SepCem) business has reported lower earnings before interest, taxes, depreciation and amortisation (Ebitda) of R374-million for 2021, compared with Ebitda of R381-million reported for 2020.
Revenue, however, came in 7% higher year-on-year at R2.56-billion, owing to an increase in selling prices.
The annual after-tax profit was R81.6-million, compared with after-tax profit of R44-million in 2020.
The 36% equity-accounted profit for SepHold is R29.4-million.
The company comments that its performance was impacted by a 15% decrease in volumes during the second half of the year, amounting to a 1% lower sales rate for the full-year.
SepCem comments that the adverse performance in the second half of the year resulted from the anomalously higher comparative volumes in 2020 and was exacerbated by unplanned plant outages at the start of the fourth quarter.
The exceptional sales volumes in 2020 are attributed to a spike in home improvement projects as many individuals spent their discretionary income in this manner during the pandemic.
Comparing sales volumes of 2021 with 2019, which is considered more of a “normal” period, sales volumes of the two halves of the year were 12% and 6% higher, respectively, resulting in an annualised increase of about 8%.
SepCem reports that imported cement volumes increased by 7% year-on-year to about 1.1-million tonnes in 2021, compared with 990 000 t in 2020.
About 83% of the total imported volumes entered through the Durban port in KwaZulu-Natal, and 63% was imported from Vietnam. The cement industry’s application for a safeguard tariff from the International Trade Administration Commission of South Africa has continued to stall, the company states, and it believes a positive outcome would meaningfully improve the performance of the building sector.
SepCem’s debt stood at R597-million at the end of February, with the next R69-million capital payment due in May.
The company is engaging with its lenders to convert the project loan bullet instalment due November 2022 into a revolving facility by mid-year.