Pretoria Portland Cement’s first-half profit declined by 85 per cent, the cement maker said on Tuesday.
Net income fell to R103 million from R674 million in the previous year, the company said.
However, management said it remained confident that "a solid performance reflecting strong operating cash flows" would be reported for the full year.
Positive signs included further expected reductions in South African interest rates which would generate some resumption of activity in the residential and other interest rate sensitive sectors later in 2009 and heading into 2010, the company said.
In the meantime, rural demand was expected to continue to underpin bagged cement demand, PPC said.
The company added that its black economic empowerment transaction --which placed 15 per cent of the company in the hands of black investors – had cost ZAR487m.
Its long-term borrowings increased to ZAR2.6bn post the finalisation of the BEE transaction.
ZAR1.5bn was raised to replace expansion capex related short-term debt and ZAR1.1bn related to debt consolidated in respect of the BEE transaction funding.
"The company will continue to raise appropriate long-term debt to fund future major expansion projects," it said.