Pretoria Portland Cement (PPC) posted an eight per cent rise in full-year headline earnings per share but southern Africa cement sales volumes slipped due to a tough housing market.
PPC said headline EPS – South Africa’s key profit gauge which strips out capital, non-trading and some extraordinary items – rose to 283 cents from 263 cents. In southern Africa, cement volume sales declined 1.6 per cent – its first decline in seven years – due to weaker demand from the residential sector, although this was mostly offset by infrastructure growth, spurred by the 2010 soccer World Cup. Despite current turmoil in global markets, PPC said it expected to report a steady performance and continue to reflect a strong operating cash flow in the year ahead.
It said that while slower economic growth would likely further impact the housing market, infrastructure expansion should be less affected and cement demand for affordable housing would remain firm. PPC said diesel prices increases had caused a substantial rise in cement distribution costs. It added that it reduced cement imports into South Africa to 70,000t compared to 202,00t in 2007 as it produces more cement locally.
PPC said margins were reduced in the lime-producing unit impacted by spiralling coal and diesel costs and electricity price increases. PPC, which was spun off from industrial group Barloworld last year, said operating profit rose seven per cent to ZAR2.3bn (US$234.3m) and revenue was up 12 per cent to ZAR6.2bn.