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PPC Capital Expenditure Trails as Fly Ash Project Faces Delays

Cement makers in US$100m upgrades to meet demand

PPC (Pretoria Portland Cement) reports that its capital expenditure for the financial year ending March 2024 is trailing behind the targeted R600 million due to delays in implementing the fly ash project in Zimbabwe.

The company had announced its capital expenditure plans, including the fly ash project, last November, but the project’s progress has been hindered as it is still in the procurement stage. Delays are attributed to difficulties in accessing the power plant necessary to finalize the design and commercial contract.

As a result, the fly ash project is now expected to commence in early FY25 instead of FY24, postponing the project’s benefits by approximately one year.

However, PPC notes positive cash flow from its South African and Botswana operations, excluding dividends from Zimbabwe, which increased to R364 million compared to R242 million in the same period last year.

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The company’s share repurchase program reached the approved level of R200 million in the first half of March 2024. Following the sale of its 51 percent shareholding in CIMERWA, PPC’s South African and Botswana operations turned cash positive, with a net cash position of R280 million as of January 31, 2024.

In Zimbabwe, PPC’s operations saw a 41 percent increase in volumes, driven by housing and government-funded infrastructure projects. The government’s focus on infrastructure development, including road rehabilitation and housing construction, has contributed to this growth.

PPC also reports a 27.6 percent increase in revenue during the 10-month period compared to the same period last year, primarily due to strong growth in its Zimbabwe operations.

Dividends of US$4 million and US$7 million were declared by PPC Zimbabwe in July and November 2023, respectively, with another dividend declaration expected in July 2024.

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