Pretoria Portland Cement (PPC) saw its profit increase due to SA’s cement demand for its infrastructural projects, it said on Wednesday.
In its interim results for the half-year ended March 31 2008, PPC reported a 16 percent improvement in headline earnings per share, an increase in revenue by 13 percent to R2,9 billion, and an increase in cement production volumes of three percent.
It declared an interim dividend of 45 cents per share.
Chief executive John Gomersall said the results were "robust", given current market conditions "with cement demand being driven by infrastructural and affordable housing programmes."
The company said that Southern African regional cement demand reduced by 1.3 per cent for the period under review – due to the combination of the exceptionally high rainfall, the Easter holidays falling in March this year and a softening of demand from the residential sector.
However, the level of active infrastructural projects continued to increase "and to some extent has offset the slowdown experienced in the residential sector."
Looking ahead, PPC said that infrastructure investment was continuing, with increased demand from government and public enterprises projects and the 2010 Soccer World Cup stadiums and related projects.
"The number and size of infrastructural projects, both in progress and planned, bodes well for industry cement demand in the medium-term and is expected to reduce the impact of the current slowdown in the residential sector."
Turning to Porthold – its operations in Zimbabwe – PPC said that operating and trading conditions remained very difficult with the country seeing hyperinflation and ever increasing shortages of basic commodities.
"Availability of both inputs and foreign currency from the Zimbabwe Reserve Bank make the continued production of cement extremely challenging," PPC said.
"These and the current unstable political circumstances continue to warrant the non-consolidation of Porthold’s results."