Bullish PPC ups earnings on building boom

PRETORIA Portland Cement (PPC) today posted a 16% rise in full-year headline earnings per share and forecast a healthy performance this fiscal year, as demand for building materials booms.

PPC reported headline earnings per share of 263c and a 19% rise in revenue to R5,6bn for the year to end-September.

"This is another good set of results on the back of continued growth in cement volumes, with all of our production units running at very high utilisation levels to meet the high cement demand," CE John Gomersall said.

"We remain focused on maximising our efficiencies, though this has not been without its challenges due to increased energy and transport costs, and a higher level of maintenance cost occasioned by these high utilisation levels."

Gomersall said the firm was set to commission new capacity early next year, which should lift output during the second half and reduce its reliance on imports to meet demand for cement.

This, he said, should produce "another improved performance", despite a possible slowdown in residential construction due to rising interest rates.

Demand for property has been such in SA over the past several years that companies have been forced to import products, particularly for infrastructure and construction heavily, straining the country’s trade balance.

SA firms have often complained that strength in the volatile rand currency makes imports expensive.