PPC Attending BofA Securities Investor Convention and Operational Replace for the 11 months ended February 2020:
PPC Attending BofA Securities Investor Convention and Operational Replace for the 11 months ended February 2020
(Integrated within the Republic of South Africa)
(Firm registration quantity 1892/000667/06)
JSE ISIN: ZAE000170049
JSE code: PPC ZSE code: PPC
(‘PPC’ or ‘Firm’ or ‘Group’)
PPC ATTENDING BofA SECURITIES INVESTOR CONFERENCE AND OPERATIONAL UPDATE FOR THE 11
MONTHS ENDED FEBRUARY 2020
BofA SECURITIES INVESTOR CONFERENCE
PPC shall be taking part within the digital BofA Securities Investor Convention on
Wednesday 18 and Thursday 19 March 2020. In preparation for this occasion, PPC has ready
an operational replace, which displays data on PPC operations for the interval
April 2019 to February 2020 as outlined under.
The buying and selling efficiency within the Group’s Southern Africa companies has began to point out
indicators of stabilisation by way of cement volumes while the enterprise continues to
realise year-on-year cement value will increase. The Worldwide cement enterprise has
delivered a resilient efficiency for the interval with continued year-on-year income
development in DRC and Rwanda while PPC Zimbabwe has seen an enchancment in EBITDA margins
and is absolutely self-funding. The Group has continued with stringent value containment
supported by a restructured Group head workplace. Group capex has diminished considerably
when put next with the identical interval final yr, and is anticipated to be on the decrease finish
of the guided vary of R600m to R800m given on the Group’s interim outcomes. The
discount in capex is anticipated to counter the adverse affect of diminished EBITDA. All
enterprise models are assembly their debt obligations apart from the DRC operations, which
has continued to pay solely its curiosity obligations. Within the DRC, PPC has efficiently
negotiated an extension to the capital moratorium which expired in January 2020.
UPDATE ON THE CAPITAL STRUCTURE
PPC indicated to traders in November 2019 that administration was reviewing the capital
construction of the Group. Subsequently, PPC has launched into a challenge to refinance and
restructure the Group. There are three elements to this, all of that are at varied
phases of improvement.
1) The primary a part of this challenge entails:
a) The relief of covenants in respect of South African debt. That is partially
full and is anticipated to be finalised inside the subsequent three months,
b) The extension of capital repayments with regard to the maturity profile in South
Africa is within the early phases and progressing nicely.
2) The second half goals to attain an extension of the capital vacation within the DRC,
which might full a course of which commenced in July 2019. These negotiations have
concluded, and the events are finalising the associated authorized course of. It will prolong
the capital moratorium within the DRC to January 2022.
3) The third half pertains to the unsustainable debt ranges within the DRC, and its
requirement for deficiency funding from PPC Ltd. These negotiations have commenced
and PPC is contemplating varied choices for the refinancing and restructuring challenge
that could embrace a capital injection by third events into the
Worldwide cement enterprise. PPC will replace shareholders at its interim ends in
June 2020 on this regard. PPC doesn't envisage a capital increase at PPC Restricted degree
for this objective.
SOUTHERN AFRICA CEMENT
PPC realised common cement value will increase in its Southern African enterprise
(together with Botswana), of 8.0% to 10.0% for the interval. SA cement gross sales volumes declined
by 16% to 18% in comparison with the corresponding interval in 2019 (“comparable interval”).
Elevated importer and blender exercise has impacted PPC’s home volumes and
pricing. Whole cement imports elevated by 17% for January 2019 to December 2019
in comparison with the identical interval in 2018, amounting to roughly 1.2 million tonnes.
The coastal enterprise is experiencing a downturn in volumes impacted by imports, while
inland volumes are displaying indicators of enchancment. The Concrete Institute (“TCI”) on
behalf of the home cement trade has accomplished its submission to the
Worldwide Commerce Administration Fee (“ITAC”) highlighting the affect of
imports on home cement manufacturing.
The materials companies consisting Lime, aggregates and readymix skilled a
mixed decline in income and EBITDA of 5% to 10%. The Lime enterprise has been
hampered by constrained metal demand, exacerbated by the Saldhana shutdown, while
the aggregates and readymix companies skilled muted demand as a result of their publicity
to the home development sector. The Lime and aggregates companies benefitted
from elevated metal manufacturing within the Gauteng area and a diversification technique
to broaden the client base.
Regardless of the difficult buying and selling circumstances in Zimbabwe, together with liquidity
constraints and inflationary pressures, PPC Zimbabwe stays self-sufficient. General
cement gross sales volumes have declined by 15 to 20% as a result of a weaker financial local weather,
offset by cement pricing which has been aligned to enter value inflation. PPC Zimbabwe
achieved EBITDA margins of 35% to 38%. PPC Zimbabwe has continued to satisfy its debt
obligations in nation.
In Rwanda, Cimerwa continues to learn from elevated development exercise and excessive
financial development. The enterprise achieved greater volumes, with EBITDA monitoring in line
with the prior interval supported by secure pricing. Cimerwa by which PPC holds a 51%
stake, has indicated to PPC its intention to checklist the enterprise on this calendar yr
on the Rwandan Inventory Trade. PPC views this as a constructive step by the corporate to
diversify its shareholder base and unlock worth for PPC shareholders.
DEMOCRATIC REPUBLIC OF CONGO (DRC)
The EBITDA efficiency of the enterprise is monitoring greater in comparison with the identical interval
final yr, supported by secure gross sales volumes and pricing. PPC is at present participating
with its lenders to restructure the debt within the DRC and put in place a extra sustainable
capital construction, as addressed above
CORONA VIRUS (COVID-19)
In early March 2020, PPC fashioned a devoted process workforce to cope with the Corona virus
(COVID-19) outbreak and applied the primary protecting measures. The corporate is
following the rules from the World Well being Organisation, South African authorities
and different regulatory our bodies within the international locations the place the Group has operations. Such
tips associated to gadgets comparable to employees journey, safety of the premises, hygiene
measures and social distancing. PPC continues to observe the affect on the enterprise
each from an financial and social perspective and actively helps the containment of
the dangers for its staff and enterprise companions considering varied situations for
future developments. PPC will preserve traders up to date as to any vital
developments which might be impacting the enterprise. Presently, PPC is absolutely operational
throughout all jurisdictions.
PPC administration is concentrated on concluding the refinancing and restructuring within the
Worldwide cement enterprise. The Group will proceed to give attention to bettering the
efficiency of its core operations and positioning the Group for future development because the
main group within the South African cement trade.
The knowledge on this operational replace has not been reviewed or reported on by
the Firm’s exterior auditors.
18 March 2020
Merrill Lynch South Africa (Pty) Restricted
Head Investor Relations
Tel: +27 (0) 11 386 9000
Monetary Communications Advisor:
Cell: +27 11 050 7536
Date: 18-03-2020 08:00:00
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