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Friday, 10 January 2014 08:43

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Improvement in South African and Zimbabwean cement sales help support PPC\'s results in the interim period ended March.


\"KetsoAn improvement in South African and Zimbabwean cement sales helped support PPC\'s results in the interim period ended March SA\'s premier cement maker said on Thursday.

But a fall in demand for lime in the period due to challenges in SA\'s steel and alloys industries saw operating profit plunge by more than half to R41m from R95m last year.

Cash generated from operations up 20% with normalised earnings per share increasing by 4%.

However despite the group saying it had seen tangible progress with its Africa expansion strategy and had resolved technical issues at its Dwaalboom plant in Limpopo costs of sales of R2.6bn were 9% higher on the back of electricity and depreciation costs which rose by 18% and 11% respectively.

We are pleased to report that PPC\'s cement sales volumes in Zimbabwe and SA have increased for the period new CEO Ketso Gordhan said.

This encouraging trend was however tempered by weakness in cement sales in Botswana as well as lower demand in the lime and aggregates divisions he said.

Total cement sales volumes rose by 6% for the period mainly as a result of continued strong growth in Zimbabwe and an improvement in South African cement volumes.

Group revenue rose 8% to R3.8bn on the back of increased volumes improved cement pricing and the favourable devaluation of the rand against the US dollar and Botswana pula.

But revenue was affected by a 16% drop in revenue for the group\'s lime division as a result of a 20% decline in lime sales volumes.

Administration and other operating expenditure increased by 19% to R381m because of additional costs incurred in executing the group\'s African expansion drive including the finalisation of the acquisition of the Cimerwa cement group in Rwanda.

Cimerwa sold 51% of its equity to PPC for cash of $69m. The Rwandan group\'s capacity of 100 000 tons of cement a year is being increased to 600000 tons per annum that will be commissioned during 2014.

PPC\'s cash generated from operations rose to a little more than R1bn from R889m previously.

At 12.15pm on the JSE PPC share price was down 2.9% at R33.73.

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Murray & Roberts is South Africa’s leading engineering and construction services company. It has delivered infrastructure throughout South and Southern Africa for more than 110 years and is today recognised as an international engineering and construction…