PPC is­sues profit warn­ing

Chronicle (Zimbabwe) - - Business -

RE­GIONAL ce­ment maker Pre­to­ria Port­land Ce­ment (PPC) stocks dropped as much as 17 per­cent on Mon­day, on news that the com­pany’s head­line earn­ings per share (Heps) for the six months to end-Septem­ber 2016 are ex­pected to be be­tween 65 per­cent and 85 per­cent lower than re­ported for the pre­vi­ous six-month pe­riod to end-March 2016.

This trans­lates to ex­pected head­line earn­ings of be­tween 19 cents and 8 cents per share, PPC said in a trad­ing state­ment. It added that ba­sic earn­ings per share for the six months to end-Septem­ber 2016 are ex­pected to be be­tween 70 per­cent and 90 per­cent lower than the ba­sic earn­ings as re­ported for the pre­vi­ous half year, trans­lat­ing to ex­pected ba­sic earn­ings of be­tween 21c and 7c/share.

PPC at­trib­uted this drop mainly to the high fi­nanc­ing costs in­curred for the rais­ing fee and re­lated in­ter­est charges for the R2bn liq­uid­ity and guar­an­tee fa­cil­ity se­cured in June 2016 to re­deem the out­stand­ing PPC notes.

The non-re­cur­rence of the ex­cep­tional profit of R117m made on the sale of non-core as­sets in the prior pe­riod also con­trib­uted to the de­cline in ba­sic earn­ings per share. In ad­di­tion, the de­val­u­a­tion of lo­cal cur­ren­cies - in par­tic­u­lar the Demo­cratic Repub­lic of Congo and Rwanda - against the US dol­lar also had a sig­nif­i­cant im­pact.

PPC pointed out that the above in­for­ma­tion has not been re­viewed or re­ported on by the com­pany’s ex­ter­nal au­di­tors.

PPC stocks staged a strong re­cov­ery in af­ter­noon trade on the JSE and stood at R5.60 on the JSE at 15:51, down 1.93 per­cent

In June this year, PPC raised a R2 bil­lion ($148,14 mil­lion) liq­uid­ity and guar­an­tee fa­cil­ity to re­deem the out­stand­ing PPC notes, which at­tracted high costs.

Also, PPC share­hold­ers in Au­gust ap­proved a rights is­sue to raise $253 mil­lion as part of a strat­egy to re­view its bal­ance sheet and to pay off debts due this year and next year. — Fin24.

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