PPC says business is picking up, while intensive DRC restructure talks continue


JSE-listed cement producer PPC on Wednesday mentioned its buying and selling efficiency in Southern African is beginning to stabilise. 

In an operational replace for the 11 months from April 1, 2019, to February 29, this yr, PPC said that the Southern African companies had stabilised by way of cement volumes, whereas they continued to understand year-on-year cement worth will increase.

The corporate’s worldwide cement enterprise had delivered a resilient efficiency within the interval underneath overview, with continued year-on-year income development within the Democratic Republic of Congo (DRC) and Rwanda.

This whereas PPC Zimbabwe had achieved an enchancment in earnings earlier than curiosity, taxes, depreciation and amortisation (Ebitda) margins and was absolutely self-funding.

According to stringent value containment measures undertaken in recent times, PPC expects its capital expenditure (capex) for the complete yr ending March 31 to be on the decrease finish of steering of between R600-million and R800-million.

PPC mentioned the discount in capex ought to offset the destructive influence of decrease Ebitda.

All of PPC’s enterprise items had been assembly their debt obligations, aside from the DRC operations, which solely managed to pay its curiosity obligations. On this regard, PPC had efficiently negotiated an extension to the capital moratorium for the DRC operations, which expired in January.

PPC in November final yr introduced it might overview the capital construction of the group. It subsequently launched into a mission to refinance and restructure the corporate.

The primary a part of the mission entailed the comfort of covenants in respect of South African debt. This was partially full and was anticipated to be finalised throughout the subsequent three months.

Moreover, the restructuring concerned the extension of capital repayments with regard to the maturity profile in South Africa, which was within the early phases and progressing nicely. The second a part of this factor was to attain an extension of the capital vacation within the DRC, which might full a course of that began in July final yr.

These negotiations within the DRC had concluded and the events concerned had been finalising the authorized course of. This capital vacation extension would lengthen the capital moratorium within the DRC to January 2022.

The third factor of PPC’s restructuring encompassed the unsustainable debt ranges within the DRC and its requirement for deficiency funding from PPC.

These negotiations had began and PPC was contemplating numerous choices for the refinancing and restructuring mission which will embrace a capital injection by third events into the worldwide cement companies.

PPC would replace shareholders on these issues at its interim outcomes launch in June; the corporate did affirm it was not planning on enterprise a capital increase at PPC group stage for this goal.

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