PPC Reports Loss on Higher Finance Costs, Low Domestic Prices

JOHANNESBURG (Capital Markets in Africa) – PPC Limited reported a full-year loss of 295 million rand ($22.9 million) as the South African cement maker incurred higher finance costs following the downgrade of the company’s debt and battled persistent low prices in its home market.

Earnings per share excluding one-time items slumped 93 percent to 7 cents a share, the Johannesburg-based company said in a statement on Wednesday. Sales rose 5 percent to 9.6 billion rand, while capacity increased as plants in Ethiopia and the Democratic Republic of Congo came on stream.

“The business will continue to focus on mitigating economic and market risks in the regions we operate in,” the company said. “PPC remains well positioned for the medium to long term, notwithstanding the current challenging operating climate.”

PPC was forced to raise 4 billion rand in a rights issue last year after S&P Global Ratings cut its debt to junk, triggering early redemptions by bondholders. That resulted in higher finance costs, interest charge and tax rate, Chief Executive Officer Darryll Castle said in the statement. The South African market was affected by tough competition and excessive rainfall and talks to merge with rival AfriSam Group Pty Ltd. remain inconclusive, the company said.

PPC shares slumped last week when the company warned on profit, and have gained 1.1 percent this year. That values the company at 8.9 billion rand.