PPC pushes up its prices and volume

Cement maker PPC said on Tuesday it improved effective selling prices in its South African cement business and was steadily ramping up production at its African operations.

In an investor presentation at the RMB Morgan Stanley Big Five Investor Conference in Cape Town, PPC said it improved volume in Zimbabwe and Rwanda by 15% to 35% in the five months to end-August.

Effective selling prices rose 2% in SA and by 2% to 6% in Zimbabwe. Increased prices and cost efficiencies in Botswana offset declining volumes in that market.

PPC is being courted by three bidders as it considers the potential of a pan-African combination to compete with regional and multinational rivals. PPC is also eyeing improved performance of its African investments to offset increased competition in SA.

Analysts have said the company has seemingly been responding to concerns among investors about its liquidity. PPC said earlier in September it would cut capex by between 16% and 35% until 2019 and would now focus on bringing its other investments in the rest of Africa into operation.

Consensus on the S&P Capital IQ intelligence platform is for a “buy”.

PPC said it had improved its debt position in August compared with June and had commenced negotiations with lenders regarding the restructuring of outstanding debt in the Democratic Republic of Congo.

PPC shareholders are considering a revised merger proposal from AfriSam, which has the backing of Canada’s Fairfax Africa Investments.

The Canadian firm undertook to buy R2bn in ordinary shares in PPC at R5.75. The partial offer from Fairfax also includes a proposed R4bn recapitalisation of AfriSam.

Earlier in September, PPC confirmed Nigerian-based Dangote Cement had expressed formal interest in the acquisition.